I am hoping to wait until my FRA in 2/2020 to collect benefits. I am eligable for my benefits and divorced spouse benefits. If I decide only to wait till October 2019 to collect benefits how much of the 8% increase will I forfite if any? My spouse who retired at FRA makes quite a bit more than me, I am estimated to receive $1960.00 monthly at FRA. Could you help me understand how the two benefit amounts arrived at. Loved your/colleagues book, thank you

Hi,

The monthly rate that you would receive if you file for your Social Security retirement benefits at full retirement age (FRA) is called your primary insurance amount (PIA). Since you were apparently born after January 1 1954 you will be deemed to be filing for both divorced spousal benefits and your own retirement benefits whenever you file for either benefit. You will then receive the higher of the two rates, and your benefit rate will be reduced for age if you start drawing prior to FRA.

Unreduced divorced spousal benefits are calculated based on 50% of the worker's PIA. So, if you file effective with the month you reach FRA it sounds like you would be paid the higher of your own PIA or 50% of your ex-husband's PIA. If 50% of your ex's PIA is higher than your own benefit rate, you would actually be paid your own full rate plus a partial divorced spousal benefit equal to the difference between your own PIA and 50% of your ex's PIA. But, if you file prior to FRA both benefit rates would be reduced for age.

For example, say Jan files for benefits effective with October 2019. Jan's FRA is February 2020, and her PIA is $800. Jan is also eligible for divorced spousal benefits, and her ex's PIA is $2600. If Jan had filed effective at FRA, she'd have been paid her own full rate of $800, plus the $500 difference between 50% of her ex's PIA and her own PIA (i.e. $2600/2 - $800). Her combined monthly rate would then have been $1300. However, since Jan is filing 4 months prior to FRA, her own retirement rate would be reduced for age from $800 to $782 and her divorced spousal rate would be reduced from $500 to $486. Therefore, Jan would end up receiving a reduced rate of $1268 instead of her full rate of $1300.

If your PIA is as high as $1960, though, you won't be eligible for any additional divorced spousal benefits for at least as long as your ex-husband is living. His PIA would then have to be more than around $3920 in order for you to qualify for additional divorced spousal benefits, and it would be virtually impossible for him to have a PIA anywhere near that high. If your PIA is in fact $1960 and you start drawing your benefits 4 months prior to FRA, your reduced rate would be roughly $1916.

Before you decide on when to start drawing your benefits, you may want to consider using our software to fully explore and compare all of your options so that you can choose the best possible strategy for claiming your benefits.

Best, Jerry