Ask Larry: If We Divorce, Could My Wife Collect On Her First Husband’s Record?

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Social Security may be one of your largest assets. What and when you collect will make a huge difference to your lifetime benefits.

Today’s column addresses some potential effects of remarriage and divorce on benefit eligibility, benefits received after the recipient has died, what happens when benefits are lost to the earnings test, withdrawing or suspending and earning benefit increases after filing early. Larry Kotlikoff is the founder and president of Economic Security Planning, a company that markets Maximize My Social Security, a Social Security benefits calculator referred to in this post.

See more Ask Larry answers here.

Ask Larry about Social Security:

If We Divorce, Could My Wife Collect On Her First Husband’s Record?​​

Hi Larry, We have computed that my wife’s Social Security retirement benefits will be less than her divorced spousal benefits would be from her first marriage. I understand that she cannot claim these benefits since she remarried. Would she be able to claim divorced spousal benefits from her first marriage if she and I were to divorce? We’ve been married 5 years. She was married to her first husband for 27 years. Thanks, Curtis

Hi Curtis, Yes, assuming that she meets all of the other requirements for entitlement to divorced spousal benefits on her first husband’s record. But, that would likely also disqualify her from being able to draw benefits on your record. That may not be important depending on the potential benefit rates involved now and in the future, but you’ll want to make sure that you know all of the ramifications involved if you’re considering divorce simply for monetary reasons. Best, Larry

Can Someone Help Me?​​

H Larry, My father passed in early June two years ago and his last Social Security retirement benefit check came in mid June. We had already withdrawn a portion of it before finding out about a month or two later, when we went to withdraw the remaining portion, that the Social Security put a hold on his funds. I have written letters and made numerous calls to Social Security and the bank. They keep blaming each other. I now went to Social Security and they swear they cannot put holds and that the bank must release the funds. The bank swears they cannot release the funds until the hold is removed. This is now an almost two year battle. Can someone help me? Thanks, Sandra

Hi Sandra, I’m sorry for your loss. Here’s the deal: the payment that came in mid June was apparently your father’s Social Security payment for May. Since he lived throughout May, that payment would be due. However, since it was delivered after his death, the bank would have to return the funds to the US Treasury department.

In order to claim the underpayment, someone needs to submit a written request for the underpayment on a form SSA-1724. As his daughter, you are authorized to submit the form. There is a specific priority order for payment of a Social Security underpayment, which is explained on Social Security’s website: Best, Larry

When Can I Expect To Get Some Of The Money Back That Social Security Withheld?​​

Hi Larry, Last year Social Security withheld $7,900 of my retirement benefit because I am still working. When can I expect to get some of it back? I will be 66 in July. Thanks, Art

Hi Art, Assuming that the correct amount was withheld, that money won’t be returned to you directly. However, if Social Security withheld more than $1 of benefits for each $2 that you earned in excess of $16,920 last year then they will refund the excess withholding as soon as they’ve verified your 2018 earnings. You may be able to speed up the process by submitting proof of your 2018 earnings to Social Security.

Indirectly, you’ll begin to recoup money lost to the earnings test in the form of a higher monthly benefit rate effective at your full retirement age (FRA). Social Security should raise your monthly rate by roughly 5/9ths of 1% for each month that your benefits were reduced for age but for which you ended up not receiving benefits due to the earnings test. Those types of recomputations are done automatically but it could take up to 18 months after your FRA to receive the higher rate. Any applicable rate increase would be paid retroactive to FRA, though. Best, Larry

Should I Withdraw Or Suspend My Application At This Time?​​

Hi Larry, I am 67 and less than a month ago, I went to file for my Social Security retirement benefit. The representative said I could take retroactive benefits so I did but now I’m not sure if that was the right choice. Should I consider either suspending my benefit or withdrawing my application? Thanks, Gloria

Hi Gloria, Regardless of when you stopped working, your Social Security retirement benefit rate would increase by 2/3rds of 1% per month for each month that you delay taking benefits from full retirement age (FRA) until 70. You aren’t required to take retroactive payments, so if that’s what happened you could either a) ask Social Security to change your month of benefit entitlement, or b) withdraw your application and refile at a later date. You could suspend your benefits prospectively instead, but you would then not receive any delayed retirement credits for any months for which you were paid benefits.

Before deciding, you may want to try an expert Social Security benefits calculator, such as my company’s software or other great and reliable software, to determine your best strategy, particularly due to the fact that it sounds like you have a disabled child who may be impacted by your decision. Best, Larry

Can I File For Benefits Early And Still Earn Delayed Retirement Credits Later?​​

Hi Larry, I’m almost 63. If I opt to take my Social Security retirement benefits now because I cannot find work in my area, can I then voluntarily suspend benefits at my full retirement age so I can earn delayed retirement credits until I reach 70? Also, if SSA has not yet correctly computed my W-2 wages for last year, will they adjust my monthly benefit to reflect that? Thanks, Paul

Hi Paul, Yes, you could file for reduced benefits now and later receive delayed retirement credits (DRCs) if you suspend your benefits between your full retirement age and 70. You may first want to use an expert Social Security benefits calculator as described in other answers to compare your options and determine your best strategy. And yes, if Social Security calculates your benefit rate using the wrong earnings amount for a given year, your rate could be recalculated using the correct amount of earnings. The recalculation would be retroactive in that event for benefits payable for the following year. Best, Larry

To learn more about your Social Security options, visit Economic Security Planning, Inc.

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