Ask Larry
At this time’s Social Safety column addresses questions on how and when COLAs are utilized, switching to spousal advantages after early retirement advantages and divorced survivor’s advantages earlier than retirement advantages. Larry Kotlikoff is a Professor of Economics at Boston College and the founder and president of Financial Safety Planning, Inc.
Should not My Age 70 Profit Estimate Improve With Every 12 months’s COLA?
Hello Larry, I’m at full retirement age, 66 years and two months. I’ve not utilized for my Social Safety retirement profit. It appears after I go to the Social Safety web site, my profit estimate at 70 by no means will increase.
Should not it enhance with the COLA every year? Additionally, the calculator solely reveals my profit rising every half yr. That’s, the profit at 67, or 67 and one month or 67 and two months is identical quantity. It will increase at 67 and 6 months. Why would not the profit enhance every month? Thanks, Beverly
Hello Beverly, You may be credited with all Social Safety COLAs that happen between now and while you flip 70 whether or not you wait to file or not. Social Safety COLAs are credited to an individual’s Social Safety retirement profit fee beginning at 62 no matter after they apply for advantages.
You’d additionally obtain delayed retirement credit (DRCs) for every month that you do not gather advantages beginning with the month wherein you attain full retirement age (FRA) and persevering with by means of the month previous to the month wherein you attain 70. The explanation that DRCs aren’t mirrored on among the estimates you are viewing is that DRCs are solely added to learn charges every January, and once more at 70.
For instance, if Tom filed for advantages in April 2021 when he reached 68, he would initially be credited just for the 21 DRCs he earned by means of December 2020. That may lead to the identical fee he’d have gotten if he’d filed in January 2021.
Nevertheless, beginning Tom’s profit fee for January 2022, he’d have beeen credited with the extra three DRCs he earned for not drawing advantages for January by means of March 2021. So from then on, Tom’s month-to-month fee could be roughly 2% increased than it will be if he had began drawing in January 2021. Finest, Larry
Am I Eligible To Swap To My Spousal Profit?
Hello Larry, I’ve been taking Social Safety retirement advantages since 62 and my husband filed at 65. I’m now 75 and he’s 74. Am I eligible to change to my spousal advantages? Thanks, Diana
Hello Diana, You could not truly change from drawing your individual advantages to drawing spousal advantages. When you begin drawing your individual Social Safety retirement advantages, these advantages proceed for all times.
However if you happen to later develop into eligible for the next profit fee as a partner or survivor, you possibly can apply for an extra spousal or survivor profit. When you qualify for extra spousal or survivor advantages, Social Safety then pays you an extra, or partial, spousal or survivor fee along with your individual profit.
You possibly can apply for an extra spousal profit out of your husband’s account, however you will solely be eligible if 50% of his main insurance coverage quantity (PIA) is increased than your individual PIA. An individual’s PIA is the same as their Social Safety retirement profit fee if they begin drawing their advantages at full retirement age (FRA). Finest, Larry
Is It True That I Can Draw Divorced Survivor’s Advantages Now And Let My Personal Retirement Profit Construct Till Full Retirement Age?
Hello Larry, I’m amassing my Social Safety retirement profit at 62. Once I utilized, I used to be advised I qualify to take divorced widow’s advantages and let my retirement profit fee enhance till my full retirement age . Was this true? The widow’s profit is lower than my retirement profit however I wish to wait until I’m 66 and change. Thanks, Curtis
Hello Curtis, Sure, it is true that if you happen to’re doubtlessly eligible for each your individual Social Safety retirement advantages and for survivor advantages, you could select to use only for the survivor profit and permit your individual retirement profit fee to continue to grow. Your individual Social Safety retirement profit quantity will proceed to extend till 70 if you happen to select to attend till then to change to your individual advantages.
It feels like you might wish to strongly think about ready till then to make the change. You possibly can change to your retirement advantages at any time, however if you happen to begin drawing your individual advantages previous to 70, you will then be caught with a everlasting month-to-month profit fee that is decrease than what you might have had.
Chances are you’ll wish to think about using my firm’s software program — Maximize My Social Security or MaxiFi Planner — to make sure your family receives the very best lifetime advantages. Social Safety calculators supplied by different corporations or non-profits might present correct recommendations in the event that they had been constructed with excessive care. Finest, Larry