Social Security Matters October 2

Ask Rusty - Will my Wife's Survivor Benefit Less if she Claimed Her Social Security Early?

Dear Rusty: I claimed Social Security at 70. My wife claimed her own SS at 62, and her earnings were significantly lower than mine. I understand my wife will be eligible to claim my benefit if I pass before she does, but will Social Security reduce that benefit because she didn't wait until age 65 to claim hers? Signed: Concerned Husband

Dear Concerned: Your wife's benefit as your surviving spouse will be based on two things:

· Her age when she claims her survivor benefit,

· The amount you were receiving at your death.

If she has reached her own Full Retirement Age (FRA) when she claims her surviving spouse benefit, she will get 100% of the amount you were receiving when you died (instead of her own smaller SS retirement amount). However, if she claims her survivor benefit at any time before her full retirement age, it will be reduced for claiming the survivor benefit early.

Thus, when your wife claimed her own Social Security retirement benefit (in her case, age 62) doesn't matter and doesn't affect her potential surviving spouse benefit - what matters is her age when she claims her survivor benefit. If she claims before reaching her own FRA, her survivor benefit will be reduced according to the number of months before her FRA that the survivor benefit is claimed. That reduction would be about 4.75% for each year earlier than her FRA she claims it. But if she claims her surviving spouse benefit at or after she reaches her full retirement age, she will get the amount you were receiving at your death, instead of her own smaller age 62 Social Security retirement benefit amount. FYI, your wife's full retirement age is somewhere between 66 and 67, depending on the year she was born (born in 1960 or later, her FRA is age 67).

And, just for clarity, your wife's payment as your surviving spouse will consist of her own SS retirement benefit plus an auxiliary amount to bring her monthly payment up to what she is entitled to as your surviving spouse.

Ask Rusty - Veteran Asks About Special Credits for Military Service

Dear Rusty: I just learned that if I served in the military during an active-duty period, i could get extra earnings for Social Security and that these benefits would be automatically added to my record, but I was never asked by the SS employee who calculated my benefits if I was in the military. I took benefits at age 62 (2013) due to health reasons. Should I ask for a recalculation or is it too late? Signed: Proud Veteran

Dear Proud Veteran: Thank you for your service to our country, for which you have every right to be proud. You likely heard about "Special Extra Credits for military service," which applies to those who served in the military during certain periods earlier than the year 2001. This rule can add up to $1,200 per year to your Social Security earnings record for the years you served and, since your SS benefit is based on your lifetime earnings record, your military earnings may have been included when calculating your Social Security benefit. But the rules for getting that "extra earnings credit" are a bit complex, and how much extra earnings credit you receive depends entirely on which years you served. Here's a quick summary:

• SS taxes have been withheld from military pay since 1957, so your actual military earnings are already included as part of your lifetime SS earnings record.

• If you served between 1957 and 1977, an extra $300 for each quarter of active-duty service would be added to your military pay, up to $1,200 per year maximum.

• If you served between 1978 and 2001, an extra $100 would be added to your military pay for each $300 of active duty pay received, up to a maximum of $1,200 per year. FYI, no additional earnings are added to your military pay for service years after 2001.

• Those who served on active duty before 1967 should inform SS when applying for benefits about their military service (e.g., provide a copy of DD-214). For those who served after 1967, the "special extra credits" were automatically added to their military earnings record when they applied for SS benefits.

It's important to note that the "extra credits" are additional earnings added to your military pay record - not an additional benefit amount added to your Social Security payment because of your military service. If, however, your military pay was included in the 35 years used to compute your Social Security benefit when you claimed, then your military pay affected your SS payment amount.

In any case, if you served in the military after 1967, the special extra earnings credits were automatically included in your military pay record and, thus, were automatically included when calculating your Social Security benefit when you applied. If your non-military working career consisted of over 35 years during which you earned more than you did while serving, your years in the military wouldn't be included when computing your Social Security benefit anyway (only your highest earning 35 years of earnings are included when calculating your SS benefit).

Although it's never "too late" to request a recalculation, if you served after 1967 your military pay during your service years was automatically increased by SS to account for your military service. If you served before 1967, you could contact Social Security to ensure that the extra credits were included when calculating your SS benefit. FYI, here's a copy of the Social Security rules on this topic: www.ssa.gov/pubs/EN-05-10017.pdf.