I am a 70 year old retired public school teacher collecting a pension and a very small social security benefit. My wife turns 65 in July, 2020 and, as a realtor, has contributed to her own social security earnings. We anticipate her benefits to be substantially greater than what I currently receive. Can “spousal benefits” come into play? Together, what are our options to maximize our benefit(s)? Thank you!

Hi,

I assume you mean that your earnings as a teacher were exempt from Social Security taxes, and that your Social Security retirement benefits are paid at a reduced rate due to the Windfall Elimination Provision (WEP). If that's the case, any spousal benefits for which you would otherwise qualify would almost certainly be offset by 2/3rds of the amount of your teacher's pension. That's because of the Government Pension Offset provision, or GPO (https://www.ssa.gov/pubs/EN-05-10007.pdf).

Whether or not you could qualify for spousal benefits even if GPO didn't apply would depend on your and your wife's primary insurance amounts (PIA). A person's PIA is equal to the amount their Social Security retirement benefit if they start drawing at full retirement age (FRA). Since you are already drawing your own benefits, your spousal rate would be calculated by subtracting your PIA from 50% of your wife's PIA. But, if that amount is positive then GPO would likely reduce the amount payable by 2/3rds of the amount of your teacher's pension. I'm guessing from the information in your question that would likely reduce your potential spousal rate to zero.

Since your wife was born after January 1 1954 she couldn't file for spousal benefits without also being required to file for her own Social Security retirement benefits at the same time. And, since her own PIA is apparently well over 50% of your PIA, your wife could never qualify for spousal benefits on your account.

As far as maximizing benefits, if sounds like only your wife has any filing options remaining. If she wants to receive her highest possible monthly benefit rate she'd want to wait until age 70 to start drawing. But, she could start drawing at her FRA of 66 & 2 months regardless of how much she's earning, or even sooner if her earnings are low enough to allow payment under the Social Security earnings test (https://www.ssa.gov/planners/retire/whileworking.html). However, the sooner that your wife starts drawing, the lower her monthly benefit rate will be. Your wife may want to consider using our software to fully compare all of her options so that she can choose the filing strategy she feels will maximize benefits the long run.

Best, Jerry