Today’s Social Security column addresses questions about who will and who will not have the 2022 COLA applied to their benefit rates, what happens to divorced spousal benefits when an ex dies and whether SSA actually overpaid 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.

Will The 2022 COLA Apply To Benefit Rates For People Born In 1960?

Hi Larry, In one of your answers you explained that starting with the year you reach 62, your retirement rate is credited with any subsequent COLA increases as calculated using Social Security’s formula. Such COLA increases are added to your benefit rate regardless of whether or not you start receiving benefits at 62.

I am one of the misfortunates born in 1960 so I will be 62 in 2022. Will the just 2022 COLA increase of 5.9% be applied to my benefit? Or by “subsequent” COLA increases do you mean the one next year? Did those born in 1960 just dodge a bullet the AWI issue, only to miss out on this years 5.9% COLA? Thanks, Jim

Hi Jim, Assuming that you weren’t born on January 1st, you won’t get the 2022 COLA. Only people who were born prior to January 2 1960 will have their Social Security retirement benefit rates increased by the 5.9% COLA, and those people will receive credit for the COLA even if they don’t start drawing their benefits until after the COLA goes into effect.

Basically, Social Security retirement benefit rates are credited with all COLAs that occur after a person reaches 62. People born on January 1st are considered to have reached their next age on December 31st of the prior year, which is why people born on January 1 1960 will receive credit for the January 2022 COLA.

The first retirement benefit COLA that people born from January 2 1960 through January 1 1961 could receive is the one that will likely occur in January 2023. My company’s software — Maximize My Social Security or MaxiFi Planner — includes all applicable COLAS as part of calculating how your household can receive the highest lifetime benefits available. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry


Will Social Security Take Away My Mother’s Benefits Because Of My Father’s Death?

Hi Larry, My mom and dad were married for 18 years before getting divorced. When he retired she got a spousal benefit. He passed away two weeks ago and my mom is scared to death they will take away anything she was getting. Is she entitled to anything now that he has passed? Thanks, Rich

Hi Rich, I’m sorry for your loss. I see no reason to think that your mother has anything to worry about with regard to her benefits. If your mother has been receiving benefits as a divorced spouse, then her benefit rate should go up as a surviving ex-spouse.

Divorced spousal benefits from a living ex-spouse’s account are calculated based on 50% of the worker’s primary insurance amount (PIA), whereas divorced spouses can receive up to the higher or their own benefit rate or their ex-spouse’s full rate as a survivor. Such benefit increases are automated, so once Social Security receives proof of your father’s death they should take action to raise your mother’s divorced spousal rate to a survivor rate. Best, Larry

Can Social Security Ask My Wife And Me To Return An Overpayment?

Hi Larry,, I started collecting early retirement benefits in 2014. In 2017, my wife start collecting early spousal benefits. She reported retirement from another country and they reduced her benefit rate. I reported my retirement from Poland at this time but they said is everything okay because of my 30 years of employment in the US. Now they recalculated everything and are reducing benefits for my wife and me and asking her to return of overpayment for last four years. Can they do that? Thanks, Kaspar

Hi Kaspar, Well, Social Security can ask for people to return an overpayment of benefits, but I’m not sure from your description whether or not your overpayment is correct. If Social Security reduced your wife’s spousal benefit rate because she’s receiving a pension from her work in another country, then that would be wrong.

Social Security’s Government Pension Offset (GPO) provision can cause a person’s spousal or survivor benefits to be offset by 2/3rds of the amount of a government pension they receive that’s based on their earnings that were exempt from Social Security taxes, but only if the government agency for which they worked was in the United States. Foreign pensions are specifically excluded from the definition of a government pension for purposes of the GPO provision.

So if the reason for the alleged overpayment is because your wife is receiving a pension based on her work in a foreign country, then that determination is incorrect. However, if you’re receiving a pension based on your earnings that weren’t subject to US Social Security taxes, then that pension could cause your benefit rate to be reduced due to the Windfall Elimination Provision (WEP). That’s true even if it’s based on your work in a foreign country. And, if WEP reduces your benefit rate then it would also reduce the spousal benefit rate payable to your wife.

If you had at least 30 years of earnings in the US that were subject to Social Security taxes, then you may be exempt from any WEP based reduction in your benefit rate, but only if you had at least 30 years of substantial earnings as that term is defined in the WEP regulations.

Obviously, I don’t have access to all of the facts involved in your and your wife’s case, but if you believe that the overpayment that you were notified of is incorrect then you can appeal Social Security’s determination. You and/or your wife can do so by completing and submitting a form SSA-561. The overpayment notice that you and/or your wife received should contain more specific information on what to do if you or she disagrees with Social Security’s determination. Best, Larry


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