Today’s Social Security column addresses questions about whether the income test can be a spouse’s benefit, changing benefit payment dates, and the potential effect of a foreign pension on benefits. Larry Kotlikoff is a professor of economics at Boston University and the founder and president of Economic Security Planning, Inc.
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Will my earnings affect my wife’s Social Security benefits?
Hi Larry, My wife and I plan to receive Social Security benefits. She is FRA and is only entitled to partner benefits. I’m only turning 65. If I earn more than the annual limit, will this affect her benefits? I understand the amount by which mine will be reduced. Thank you Todd
Hi Todd, yes. If you earn more than the income test exempt amount, Social Security must withhold at least a portion of both your retirement benefits and your wife’s partner benefits. The basic rule is that for every $2 an employee earns above the exempt amount, $1 of benefits payable on that employee’s record must be withheld.
That includes withholding additional benefits such as partner benefits, even if the spouse has reached full retirement age (FRA). However, in the calendar year that the employee reaches FRA, $1 is withheld for every $3 in excess earnings and only earnings in months prior to the month in which the employee reaches FRA are counted.
You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profit organizations can provide good suggestions if built with extreme care. Dear Larry
Is it true that my payday now falls on a different date?
Hi Larry, am I correct that my payday is now on different dates? Or can I count on it to stay the same? Thank you, Lisa
Hi Lisa, I don’t know if your payment date changes but we have received several questions similar to yours. All I can tell you is that the Social Security rules governing payment dates haven’t changed since 1997. Based on those rules, most people are now paid on the second Wednesday of the month, or the third or fourth Wednesday, depending on their date of birth.
The only people who should still receive their benefits on the third day of the month are people who were already receiving benefits before May 1997, or beneficiaries living outside the country, or people who qualify for Supplemental Security Income (SSI) .
So I don’t see any reason why your normal payment date should change unless you received your payments on the wrong day of the month. If you have received a notice from Social Security regarding your payment date, you should contact them for clarification. Dear Larry
Will my pension from Belgium be exempt from causing any WEP or GPO reduction in my US divorced spouse’s benefits?
Hi Larry, If I receive a Social Security pension from Belgium and after 66 years and four months receive a Divorce Benefit from the US, will my US Social Security be exempt from both WEP and GPO and not be reduced because of my foreign pension? Thank you, Lina
Hi Lina, yes. The Windfall Elimination Provision (WEP) does not apply to auxiliary (eg spouses, divorced spouses) or survivors’ benefits, so the WEP is not an issue regarding your US divorce benefits.
The Government Pension Compensation (GPO) provision does apply to supplementary and survivor benefits, but foreign pensions are excluded from the GPO definition of a “government pension”. Only government agency pensions in the US will settle a person’s assistance or survivor’s benefits. Thus, your Belgian pension will not adversely affect your ability to receive a divorce benefit under the US Social Security program. Dear Larry