Social Security Disability vs. Spouse Benefits vs. Survivor Benefits (and COLA)

Dear Rusty: I retired from working in June but will not sign up for Social Security until age 70 and, to do that, I plan to draw from my IRA for the next 3 years. My wife is receiving Social Security disability benefits and will reach her full retirement age in March of next year. I know that my wife simply reaching her full retirement age will not mean an increase to her benefit – except for COLA. What I’m wondering is, can my wife get spousal benefits of any sort based on my Social Security benefits – either before I draw or after I am drawing – apart from her benefits at my death? Her Social Security disability amount is only a fraction of my maximum benefit. Signed: Baffled Husband

Dear Baffled: Looks like you’re confused about your wife’s Social Security disability benefits, retirement benefits, spousal benefits and survivor benefits.

Here’s what you need to know
When your wife reaches her full retirement age next year, her current Social Security Disability Insurance benefit will automatically convert to become her regular SS retirement benefit at the same amount she was receiving on SSDI (disability). The amount stays the same because your wife’s SSDI amount is based on her FRA entitlement.

Your wife cannot get any spousal benefits from you until you claim your own Social Security retirement benefit. Since you plan to delay claiming until you are 70 several years from now, after your wife’s SSDI converts to become her regular retirement benefit at her FRA next year, she will continue to receive her own SS retirement benefit until you claim. At that point your wife will get a “spousal boost” added to her own SS retirement benefit. The amount of her spousal boost will be the difference between her FRA entitlement (same as her SSDI amount), and 50 percent of your FRA entitlement (not half of your age 70 amount – spouse benefits are always calculated using FRA amounts, regardless of when Social Security is actually claimed).

Your wife cannot get a spousal benefit from you until you start your Social Security, but after you claim she will receive her higher spousal benefit (her own SS retirement benefit plus a spousal boost) for the rest of her life, or until you predecease her. If you die first, your wife will get 100 percent of the amount you were receiving at your death (e.g., your age 70 amount), instead of the smaller amount she was receiving as your spouse while you are both living.

Regarding COLA, after becoming eligible for benefits, everyone gets the annually awarded COLA increase whether they are already collecting SS benefits or not. The next annual COLA increase will be added to your wife’s SSDI at the end of this year and added to her SS retirement amount each year thereafter, and then to her higher amount as your spouse after you claim. And even though you are waiting until age 70 to claim, the annual COLA will still be added to your Primary Insurance Amount each year, and you will receive that past COLA in your monthly payments after you later claim.