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Will I Lose Half of My Social Security If Spouse Claims Half? - YMYW podcast - YouTube
Channel: Your Money, Your Wealth
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"My wife turns 62 in February of this year,
2019."
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Tom turns 70 in July.
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"I have been drawing Social Security since
62, as it was necessary.
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We were wiped out in the housing crash of 2017-ish.
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I think it means 2007-ish. Yeah.
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"So no savings or other income.
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My wife could take her Social Security at
about $700 per month, or I hear she could
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apply for half my $1900 that I receive.
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Question: Do I lose half my Social Security
if she claims half?
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Given the scenario above should she take her SSI? Thank you."
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OK. Tom, a few different things.
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Let me answer I guess the biggest one that
he's afraid of, is that Tom's collecting
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$2,000 a month.
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So there's something that's called a spousal benefit.
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The spousal benefit is half of Tom's benefit
- or hers, whichever is higher.
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Since her benefit is $700 a month, his is
$2,000 a month, her spousal benefit is going
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to be $1,000 a month.
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So he's asking the question, if she takes
the spousal benefit, is that going to
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reduce his benefit?
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The answer is no.
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Yeah. Absolutely not.
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Yeah, so Tom don't worry about that, if she
claims half yours, it's not like you lose
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half and she takes half.
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You'd just be stuck in the same position so
no one would ever do that, you would just
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claim your own benefit.
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So no, you're good there.
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Nothing's going to happen to your overall benefit.
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But she is 62.
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So if she takes her benefit at 62, she is
not going to receive half of the benefit.
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She's going to receive a lower amount, because
she's taking it at 62.
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She has to wait to her full retirement age
to get half of the benefit.
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So if she takes it at 62, how it basically
works is that she'll take her benefit, which
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would be a reduced benefit.
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If her benefit at 66, full retirement age,
is $700, she would receive 75% of that.
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And that would be roughly $600?
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Yeah 5-something, call it $600, not quite
as much.
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So her benefit is $600 but the spousal benefit
is $1,000, but not until she reaches age 66.
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So you've got a problem here.
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So it's looking at what happens with the spousal
benefit? It's called "deemed."
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So she might still get the spousal benefit
because they're gonna do a calculation.
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They're gonna take her benefit, they're gonna
reduce it by 25% and say, "here's what
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your benefit is."
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Now if you look to claim the spousal benefit,
they're going to shore up her benefit and
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add a spousal benefit on top of it - but she's
not going to get the full half of the benefit.
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It's going to be reduced, because she's taking it at 62.
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So in your example then...
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It's going to be roughly probably 700 bucks. (laughs)
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Well yeah but that's her benefit.
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No I'm saying her benefit is going to be reduced,
her benefit would be let's say $600.
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Shore up her benefit of spousal, because she's
not going to get 50% of it, it's going to
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be 33% of it.
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So you take 33% of $2,000.
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I'm just doing the math in my head, it's probably- it's close.
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So her benefit is roughly going to be $700.
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It doesn't make any sense to take it early
with this math - unless you need the money.
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Yes. Right.
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So the simple answer is yes, you can take
it, but you'll have a reduced benefit for life.
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Yes. So she can take the benefit.
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That's not going to affect yours, Tom, whatsoever.
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So if you need the money, take it, just know
that it's not going to be half of your benefit.
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She needs to wait to her full retirement age
to get a half your benefit.
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If she takes it at 62, it's going to be a
reduced benefit, and if you're fine with that
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reduction of benefit and that helps pay the
bills, I guess our advice is to do that.
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