My wife had only about 10 years of full time work in which SS taxes applied prior to her age 48. At 48, she took a job as a teacher which no longer has any SS taxes being paid. She is now 60 and has 12 years into the state’s retirement system and it seems that every year she continues to work only reduces what little SS benefit she had accrued. Given some health issues, and her age, it is highly unlikely she will be able to accrue any meaningful retirement benefit from her teaching. My own employment terminated in 2017 just before turning 60 and I was approved for SS Disability benefits effective to the date I stopped working.
The question we have is based on conversations with some others in which it has been mentioned that the WEP and other governmental regulation may not apply if she was a resident in a neighboring state (NH, ME for example). We will be in a fairly stressful financial position once she can no longer physically work and is forced to apply and accept whatever her two income streams will provide. In addition to her limited retirement income, we are being told she will not be able to collect a spousal or survivors SS benefit off of my SS because, 1. She never had enough SS employment time, and 2. Because I took a SS disability income.
And a secondary question is whether my SS Disability changes to what would be classified as a normal SS retirement benefit at a specific age? i.e. - At my early retirement age, 62, which I am now, or at my full retirement age of 66 1/2?
Any insight would be greatly appreciated.
Hi,
No, that's not true. Whether or not your wife will be able to collect spousal benefits has nothing to do with how many Social Security earnings credits she has accumulated. Nor would the fact that you are drawing Social Security disability (SSDI) benefits as opposed to Social Security retirement benefits have any adverse effect on your wife's ability to collect spousal benefits, provided that your monthly SSDI rate is at least roughly $1350. There is a special family maximum benefit (FMB) calculation that applies to SSDI cases that can sometimes limit the benefit amount payable to eligible family members, but that potentially lower FMB wouldn't affect your wife's spousal rate unless your SSDI rate is below around $1350.
What likely will limit your wife's ability to qualify for Social Security spousal or survivor benefits is the Government Pension Offset (GPO) provision (https://www.ssa.gov/pubs/EN-05-10007.pdf). The GPO provision mandates that if a person is drawing a government pension (e.g. federal, state, local, county) based on their own work and earnings that were exempt from Social Security taxes, then any spousal or survivor benefits for which they would otherwise qualify are offset by 2/3rds of the amount of their government pension. Therefore, if the government pension amount is at least 150% as much as the person's spousal or survivor benefit amount, their spousal or survivor benefit rate is reduced to zero.
Your SSDI benefits will automatically convert to regular Social Security retirement benefits effective with the month you reach full retirement age (FRA). That conversion will not change your monthly benefit rate.
By the way, what you were apparently told about the Windfall Elimination Provision (WEP) not applying if your wife lives in a different state is also not true. The state in which a person worked or resides has nothing to do with whether or not the applies to their own Social Security benefit rate. In other words, you can't avoid a WEP reduction to your Social Security benefit rate by moving to, or working in, a different state.
If your wife collects a pension from her work as a teacher where her earnings were exempt from Social Security taxes, then her own Social Security benefit rate will almost certainly be reduced due to WEP. WEP causes a person's Social Security retirement or disability benefit rate to be calculated using a less generous formula than the calculation formula normally used to calculate benefits (https://www.ssa.gov/pubs/EN-05-10045.pdf). However, the amount of reduction that can be caused by WEP is limited to no more than 50% of the person's non-covered pension amount. The WEP provision can never reduce a person's own Social Security benefit rate to zero.
Our software (https://maximizemysocialsecurity.com/purchase) is fully programmed to handle both WEP and GPO calculations, so you may want to strongly consider using the software to analyze your wife's options so that she can choose the best strategy for maximizing her benefits.
Best, Jerry
