Course: Insurance Planning
Lesson 10: Social Security
This question (below) doesn’t quite make sense to me. Could you clarify why the correct answer is D?
Robin Elizabeth qualifies for a retirement benefit of $250 and a spouse’s benefit of $400. At her full retirement age, she will receive which of the following?
A) Both $250 and $400.
B) The higher of her benefit or her spouse’s benefit.
C) Her spouse’s benefit of $400.
D) Her benefit of $250 plus $150 from her spouse’s benefit.
Great question. The nuance here is what benefit is paid from which spouse’s record of covered earnings (record).
Robin and her husband each have their own individual record.
- Robin is paid a retirement benefit of $250 from her own record first. She would receive that amount even if not married.
- We’re told that Robin has a spousal benefit of $400, calculated as 50% of her husband’s Social Security retirement benefit.
- She is paid the greater of the spousal benefit or her own benefit.
Here’s the nuance, Robin’s $400 is deemed to come first from her own record ($250 in retirement benefit) and then from her husband’s record for the remaining amount ($150).