Among the pile of very confusing calculations for various Social Security benefits is the incredibly confusing Spousal Benefit. This calculation becomes even more confusing when filed for prior to Full Retirement Age (FRA), as it is further reduced. Briefly, the maximum amount that a Spousal Benefit can be is 50% of the other spouse’s Primary Insurance Amount (PIA). PIA, if you’ll recall, is equivalent to the amount of benefit that the other spouse would receive in benefits at his or her own Full Retirement Age. The calculation is actually a bit more complicated than that. The Spousal Benefit for Jane (on her husband John’s record) is calculated as follows: John’s PIA times 50% minus Jane’s PIA times the early-filing reduction factor That amount is then added to Jane’s benefit, which could be reduced by filing early or enhanced by Delayed Retirement Credits for filing later, to come up with Jane’s […]
reduction factors
Age Adjustments for Social Security
Image via Wikipedia With all the talk about how Social Security is running out of money (or will be), one of the topics that often comes up is the age limits for benefits. As you’re aware, the Full Retirement Age (FRA) has been adjusted upward from the original age 65, gradually to age 67 for folks who were born in 1960 or later. This upward adjustment was put into place with the 1983 amendments, ostensibly to reduce impact on the system. With that adjustment in place, and the resulting benefit that the system has received from making that change, you might wonder why some of the other age limits have not been changed. Specifically, why has the early retirement age remained at 62, and the upper limit (maximum benefit age) has also remained set at 70? I don’t have any definitive information to back this up, but I think there […]
Sterling Raskie, MSFS, CFP®, ChFC®
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And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.