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The Mysteries of Social Security Unraveled

By Social Security Benefits FOXBusiness

Hi, Gail- I’m 61 and have been on disability since my early 50s.  Financially, my wife and I are doing fine because she has a great job.  What happens to my disability benefit when I reach Social Security age?

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Thanks, Dean

Hi, Dean-

When you reach “full” retirement age (currently 66), your disability benefit will automatically be converted to a Social Security benefit.  The amount will not change.

But the fact that your benefit has been re-classified gives you an interesting option.  At full retirement age (FRA) anyone- for any reason- can request that their Social Security benefit be “suspended.”  That is, temporarily stopped.

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While your benefit is suspended, it is eligible for the “Delayed Retirement Credit.”  This is computed on a monthly basis and amounts to an 8% increase in your benefit amount for every 12 months you do not receive a check.   In other words, if you tell Social Security that you would like your benefit suspended starting in the month you turn 66, by the time you reach age 70 your benefit will be 32% larger.

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Suspending your benefit is simple.  You can notify Social Security either by phone or in writing. Your month checks will automatically resume once you turn 70 unless you request that this happen sooner. For more information about suspending your benefit , visit http://www.socialsecurity.gov/retire2/suspend.htm.  

Keep in mind that any Supplemental Social Security (SSI) benefit you might be receiving will also be suspended if you suspend your basic benefit.

In addition, if you suspend your Social Security benefit and you are covered by Medicare Part B, you will be responsible for sending Medicare your monthly premium.  To avoid the risk of losing this coverage, you might want to arrange to have payments automatically deducted from your checking account. 

Finally, I suggest you discuss this with your financial advisor to see if this is the best strategy for you and your wife as a couple.

Hope this helps,

Gail

Dear Gail,

I am a U.S. citizen and have paid into Social Security my entire work life. On the Social Security website I found out that if I work until I am full retirement age my benefit will be $1600/month.  However, my wife, Esperanza, is not a U.S. citizen.  When I retire, is she entitled to a spousal benefit?  Does she have to become a U.S. citizen to get this?

Thanks,

Paul

Hi, Paul- The short answer is “No.”  But clarification is needed.  

According to Dorothy Clark, Senior Public Affairs Specialist at Social Security, “You don’t have to be a U.S. citizen to be entitled [to a benefit], but you must be legally present in the United States.” 

“Legally present” does not mean your wife has to actually live in the United States.  Instead, it means that she has legal status.   In other words, Esperanza cannot be an illegal alien, she must have permission from the Department of Homeland Security to be in this country.

And, of course, she must meet all of the normal criteria for a spousal benefit:

  • The two of you were legally married
  • You have been married for at least a year
  • Her spouse (Paul, in your case) is receiving Social Security benefits

Her maximum spousal benefit will be 50% of what you would receive if you waited until full retirement age to claim it:  50% x $1600 = $800/month.

However, Esperanza will only receive $800/month if she waits until she is full retirement age to file for her spousal benefit.  If she applies before this, the monthly amount she will receive will be lower.

Best wishes,

Gail

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