Do Retirement Benefits Taken After Spousal Benefits Include Social Security’s COLAs?

Today’s column addresses questions about whether cost of living allowances are applied to retirement benefits at 70 after receiving spousal benefits, taking divorced spousal benefits after disability benefits and the availability of survivor’s benefits after taking spousal benefits. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.


Do Retirement Benefits Taken After Spousal Benefits Include Social Security’s COLAs?

Hi Larry, I was born in 1954 and my husband was born in 1952. When my husband turned age 66 ,I took my Social Security retirement benefit at 64 1/2. My husband then filed a restricted application for his spousal benefit on my record when he turned 66 while he was waiting to 70 to start his retirement benefit.

His restricted application amount has been around $920 and has increased due to small COLA increases over the last few years. When he turns 70, he will begin his benefit, about $3,200, plus delayed retirement credits and maybe COLA increases.

He has had COLA increases on his spousal benefit but we are wondering if he will get the full delayed retirement credits plus the full COLA on his higher retirement benefit.

We’re also wondering when the COLA will be paid to him on his benefit since others don’t always get it on the first month of the year. He will turn 70 in October of 2022. Thanks, Alma

Hi Alma, Social Security cost of living allowances (COLAs) are applied to the primary insurance amount (PIA) of the account holder on whose record the benefits are paid. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

And since auxiliary (e.g. spousal, child) and survivor benefits are derived from the account holders PIA, all auxiliary and survivor beneficiaries receive credit for the COLAs applied to the account holder’s PIA.

COLAs are applied to an account holder’s PIA starting with the first COLA that occurs after the earlier of the account holder’s death or 62nd birthday. Workers who live past age 62 receive credit for all COLAs that occur after their 62nd birthday, even if they don’t start drawing their benefits until a later age.

So when your husband starts drawing his retirement benefits at 70, he will receive credit for all of the Social Security COLAs that have occurred since he turned 62.

Social Security COLAs are always effective with benefit payments for December, which are the payments that are due in January. Best, Larry


Is It Correct That At FRA I Can Claim 50% Of My Former Husband’s PIA Instead Of My SSDI?

Hi Larry, My husband and I were married for 21 years and I was primarily a housewife. I have subsequently worked enough to qualify for Social Security benefits and I am now on Social Security Disability. I am 62 and my former husband is 65. Am I correct in understanding that when I reach full retirement age, I can elect to draw a divorced spousal benefit at 50% of his PIA instead of my SSD? Thanks, Deborah

Hi Deborah, Your understanding is basically correct, but you wouldn’t stop getting your own benefits if you file for divorced spousal benefits. Instead, your unreduced divorced spousal benefit would be calculated by subtracting your primary insurance amount (PIA) from 50% of your ex’s PIA, which is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

That amount would then be paid in addition to your own benefit amount, and the total would then add up to 50% of your ex’s PIA as long as you don’t claim your divorced spousal benefits prior to your full retirement age (FRA).

You could potentially claim divorced spousal benefits prior to FRA, but your divorced spousal rate would then be reduced for age. But you can’t qualify for divorced spousal benefits unless you’ve been divorced for at least two years or if your ex-husband is drawing their retirement benefits. Best, Larry


If I Die, Can My Wife Continue To Draw Spousal Benefits And Wait Until Her FRA To File For Survivor Benefits?

Hi Larry, If my wife is collecting a Spousal Benefit on my record and I die, can she continue receiving her spousal benefit and wait to apply for her survivor benefit until she reaches her survivor FRA so she can maximize her benefit? Thanks, Kieran

Hi Kieran, Spousal benefits can only be paid on the record of a living spouse. If your wife is drawing spousal benefits only and if you die, her benefits would convert to widow’s benefits effective the month of your death.

However, if your wife is drawing a combination of her own retirement benefits and spousal benefits and if you die prior to her full retirement age (FRA), she could elect to receive just her own retirement benefits until FRA and then file for unreduced widow’s benefits when she reaches FRA.

Her best option in that event would likely depend on whether or not you started drawing your benefits prior to FRA.

It sounds like you and your wife may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry


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