Social Security Answers
Question 8. Someone at work said that if your husband retires first, then the wife retires later, that the wife's Social Security benefits are reduced. Is this true? If so, how much? Does this mean that the yearly statement Social Security sends out estimating the wife's benefit would not be correct, but would be a lower amount?
Answer. No, it is not true. Each spouse's Social Security benefits are calculated separately, regardless of who retires first. Here's how it works assuming that both spouses have reached Full Retirement Age when they start receiving benefits.
When the first spouse retires, his or her Social Security benefit will be calculated based only on his or her own work history. That benefit will become the couple's Primary Insurance Benefit.
When the second spouse retires, Social Security looks at the second spouse's work history. The second spouse's benefit will be based on the LARGER of:
(1) half of the Primary Insurance Benefit, or
(2) the retirement benefit that the second spouse earned as a result of her own work history.
Here are a few simplified examples:
Example #1 - Both husband and wife worked: If one spouse earned a $1,500 monthly benefit, and the second spouse earned a $1,200 monthly benefit because of his/her own work history, the couple's total Social Security benefit would be $2,700 ($1,500 + $1,200) each month.
Example #2 - Both husband and wife worked: If one spouse has earned a $1,500 monthly benefit, but the second spouse earned only a $200 monthly benefit because of his/her own work history, the second spouse's benefit would be disregarded. Instead, the second spouse would be entitled to a Social Security Spouse Benefit equal to 1/2 of the first spouse's benefit. Therefore, this couple's total Social Security benefit would be $2,250 ($1,500 + $750) each month.
Example #3 - Only one spouse worked: The couple's total Social Security income would be $1,500 PLUS a spouse benefit amount equal to half the primary amount ($750) for a total of $2,250 each month.
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