Dear Larry,

I have a complicated set of scenarios and need your advice. I bought your Maximize software but what I have in mind is beyond the average strategy.

For financial reasons… I filed online two months ago (Aug 2021) for both my Retirement and Disability simultaneously. I was 64.8 yrs old, divorced (over 10 yrs of marriage). The Retirement was immediately granted and I’m waiting on the decision regarding the Disability. I have no doubt that I will be granted Disability and receive twelve months back pay.

I am trying to find a way to continue benefits and let my Retirement accrue delayed accrued credits.

My question: If I am granted Disability before twelve months, would it a benefit me to withdraw my Retirement application and pay back the little bit I would owe for taking Retirement for a couple of months?

More pieces of the puzzle… my ex-husband (married over 10 yrs) made pretty good money, is not well and a decade older than me. If he passes away by the time I reach Widow FRA, 64.2 months) should I switch to Survivor (my Retirement is less than 100% of his SS) and put my Retirement on hold until age 70?

AND… SSA will switch me to my own Retirement at my FRA (66.6). Would there be any way to switch to Survivor between my FRA and age 70 if my ex passes and put my Retirement on hold to accrue the credits? Even if he passes when I am 68 or 69, eight percent a year is still money to be had.

It might sound convoluted, but every dollar counts at this point.

Thanks so much, Kate

Hi Kate. If you're eventually approved for Social Security disability (SSDI) benefits and if your SSDI entitlement date precedes your reduced retirement benefit entitlement date then there would be no reason to withdraw your retirement benefit application. In that event your unreduced SSDI rate would simply replace your reduced retirement rate.

For example, say Amy files for both retirement and SSDI benefits in August 2021 at age 64. Amy's primary insurance amount (PIA) is $2000, but her retirement benefit rate is reduced for age to $1666. Amy begins receiving her reduced retirement benefits, but several months later her SSDI claim is approved. Amy had become disabled and stopped working on October 1st 2020, and her date of disability onset was established as of that date. There is a 5 month waiting period for SSDI benefits, which in Amy's case is then October 2020 through February 2021. Thus, Amy's first month of eligibility for SSDI is March 2021.

SSDI benefits are calculated based on 100% of a person's PIA, so Amy would then be due back pay for the $2000 that Amy was due starting March 2021. However, Social Security would withhold from her back pay all of the reduced retirement benefits that Amy was paid while waiting for the decision on her SSDI claim. In other words, Amy's unreduced SSDI benefit rate would basically replace her reduced retirement benefit rate.

There would be no ongoing reduction in Amy's retirement benefit rate as long as her SSDI entitlement date is either the same as or earlier than the first month that she started drawing her reduced retirement benefits. In that case when Amy reaches full retirement age (FRA) her SSDI benefits would convert to regular retirement benefits at 100% of her PIA. The only way that Amy's ongoing rate would be permanently reduced is if her first month of entitlement to retirement benefits precedes her first month of SSDI entitlement.

Therefore, the only way that you'd want to consider withdrawing your retirement benefit claim is if your SSDI claim is not approved or if it's approved but with an initial month of entitlement that's later than initial month of entitlement to retirement benefits. Either way, though, you would still have the option of voluntarily suspending your benefits when you reach FRA in order to earn delayed retirement credits (DRC).

However, if you voluntarily suspend your benefits at FRA or later you could not be paid any other type of Social Security benefits while your own benefits are suspended. In other words, there's no way you could switch to drawing survivor benefits while earning DRCs on your own benefit rate. You could, however, apply for an excess survivor benefit if your survivor rate is higher than your own benefit rate. You'd then be paid your own benefit plus a partial survivor rate that would add up to your higher survivor rate.

Best, Jerry