Social Security and You: 2 cases where benefit seemed low

But I bite my tongue, or more accurately, control my fingers on my computer keyboard, and instead write back to politely tell them that they really need to address their question to someone at their local Social Security Administration office. But at the same time, I also usually point out that the Social Security benefit accuracy rate is around 99 percent. In other words, it is extremely likely they are getting exactly the Social Security benefits that they are due.

But a couple weeks ago, I just coincidentally received two separate emails involving couples with very similar circumstances. And in both cases, I thought the amount of money the wife was receiving seemed low. So in these cases, I took the initiative and suggested they contact Social Security to make sure they were being paid correctly. And what happened next makes for interesting reading and provides a good Social Security lesson.

The emails came from women in different parts of the country. Let’s call them Thelma and Louise. In both cases, the husband was getting a Social Security benefit in the $2,400 range. And both Thelma and Louise were getting about $600. The only difference was, in Thelma’s case, she was getting a wife’s benefits on her husband’s account. And in Louise’s case, she was getting her own small Social Security retirement check. Surprisingly, to me anyway, their emails did not question their benefit rates. Instead, they each asked about potential widow’s benefits. I wonder if they were planning to push their husbands off a cliff in a convertible (for those who didn’t get the joke, watch the movie “Thelma and Louise”).

Anyway, I won’t bore my readers with the answers to their questions about widow’s benefits. That’s not the point of this column. But I will share what each woman learned about their Social Security payment amounts after talking to representatives at SSA.

Thelma found out she was being paid correctly. She was the one getting wife’s benefits on her husband’s record. His $2,400 benefit rate included four years’ worth of delayed retirement credits because he didn’t start taking benefits until age 70. He had filed and suspended at age 66 so that Thelma could take spousal benefits. She was 62 at the time. At that age, she gets about one-third of her husband’s age 66 rate. His age 66 rate was about $1,800. And one third of that is $600, precisely what Thelma was getting. So again, Thelma was being paid correctly.

But Louise had a different story. She had filed for her own reduced retirement benefits at age 62. Years later, when her husband turned 66, he filed online for his own benefits. At the same time, Louise should have filed for wife’s benefits on his record. I’m not going to get into the complicated math, but she was due about an extra $400 in spousal benefits. However, she never filed for those benefits until I suggested she check with SSA. She’s now getting $1,000 per month, which includes her own $600 retirement check and $400 in wife’s benefits.

Some readers might be asking two questions. First, didn’t I say Social Security benefits were 99 percent accurate? It sure doesn’t sound like they were in Louise’s case. And second, does Louise qualify for any back pay benefits?

Actually, Louise was being paid accurately based on the information SSA had. The ball was in Louise’s court when it came to filing for spousal benefits. In other words, it was her responsibility to file that claim back when her husband signed up for Social Security. In fact, she told me her husband recalled getting some kind of computer alert from SSA about spousal benefits when he filed his online claim. Apparently, he forgot about it. (If you ask me, Louise should still consider a cliff-top ride in that convertible.)

The good news for Louise is that she was able to claim six months’ worth of retroactive spousal benefits. For the record, readers should know that the law sets a limit of six months for the payment of any retroactive benefits. But no retro benefits can be paid before age 66. Louise was a few days shy of her 69th birthday when she finally filed for these extra benefits, so she got paid back to age 68 and a half.

Q: I am 66 and about to apply for my retirement benefits. My wife is five years younger than me and has been a homemaker all her life. Do I have to do anything when I sign up for Social Security in order to ensure my wife will get widow’s benefits someday? For example, with my company pension, I opted for a lower monthly payment in order to guarantee a future widow’s compensation for my wife.

A: You don’t have to do anything special. Your wife’s potential widow’s benefit essentially depends on one thing only: Her age at the time she becomes a widow. If she is full retirement age or older when that happens, she will get 100 percent of your full retirement age rate as her widow’s benefit. If she is under full retirement age, she will get a reduced amount, down to about 70 percent at age 60, the earliest age at which a widow can claim benefits.