A Fort Myers widow is sharing her story to warn others about the unexpected challenges of applying for Social Security benefits. Michele Perez waited years to apply for new Social Security benefits, only to discover she did not qualify for the full amount.
“It was a shock when he passed away. I mean, it was just we didn’t expect it,” said Perez, reflecting on the loss of her husband, Robert, 14 years ago.
Perez has been raising their three children on her own with some help from Social Security. Earlier this year, when she turned 60, she applied for survivor benefits.
“The questions are, ‘Are you working?’ Yes, full-time? Yes. The big million-dollar question, what did you make?” said Perez.
To qualify for full benefits in 2025, the Social Security Administration requires anyone under full retirement age to earn less than $23,400 a year. According to SSA, Perez’s full retirement ageis 67.
“Who can live on $23,400? I can’t,” said Perez. “He gave me the option to reduce my work hours and go part-time. I said, ‘What kind of stupid are you? I can’t do that.’ Otherwise, I would lose my health benefits at my job,” said Perez.
Erin Fountain, a registered Social Security analyst, explained the complexities of the policy.
“If you start those benefits before full retirement age, there is going to be a certain amount of reduction. And that’s just their policy,” said Fountain. “It’s not lost forever. They restrict it for a while, and then it’s recalculated at a later date.”
Fountain also mentioned alternatives to receive the benefits.
“Not everyone wants to be a landlord, of course, but, interestingly, rental income is passive. It’s not counted against your earned income,” said Fountain.
Perez hopes to see the income limit increased so families like hers are not forced to choose between benefits and financial stability.
“I don’t understand why it’s so low. Give us a chance to get what we deserve. We lost our spouse, you know, why can’t I get that benefit?” said Perez.
Changes to Social Security would require congressional action. While reaching out to local representatives, only Sen. Ashley Moody’s office responded, stating, “Florida is home to a vibrant aging population, and Senator Moody will look at any proposal to ensure seniors have the resources they have earned for retirement.”
Social Security remains a complicated topic. WINK News took the opportunity to ask Fountain for answers.
WINK News- Can a spouse whose SS payment is substantially lower than that of the other spouse receive a higher benefit, given the discrepancy?
Fountain’s Response
A spouse may receive the higher of their own benefits or up to 50% of the Primary Earner’s benefit amount.
Benefit amounts are based on each person’s earnings history.
If Bill receives $3,000 in monthly Social Security Benefits and Sue receives $1,000 based on her own earnings record, she is also eligible to receive an additional amount of $500 that will equate to 50% of Bill’s amount or $1,500; however, if she claims prior to her Full Retirement Age (FRA) that amount is reduced. In other words, Sue would receive almost 18% less of her spousal benefit amount if she claimed early at age 62.
WINK News- If I start distribution at 62 am I locked into that even when my husband reaches his distribution age? He will be receiving much more than I, so his 50% will be larger than my amount.
Fountain’s Response
Sadly, many don’t understand what they might forfeit by claiming benefits earlier than their Full Retirement Age (FRA)
Specific to Spousal benefits, those will be reduced as well as their own if the Spouse is receiving individual benefits as well.
This applies to all benefits they are eligible to receive: Individual, Spousal and Survivor because any of those are subject to a reduction if taken before FRA.
WINK News- How do I determine the optimal age to start collecting? Is it better to wait to the max level or start when I am initially eligible, i.e., 72 or 66.6 or somewhere in between. Is there a formula that can help make the decision?
Fountain’s Response
The answer of when to claim is a complex question and depends on a number of factors – earnings history, future earned income, and life expectancy, cost of living (COLA) and inflation.
Most planners use a set of algorithms to identify the optimal age, however that does not sidestep a solid understanding of nuances within Social Security policies.
WINK News-When will Social Security no longer be part of your taxable income? In other words, when you file your taxes, Social Security is no longer counted as taxable income. Also, when will they remove the year contribution rate paid into Social Security, so higher earners pay more?
Fountain’s Response
Social Security was not taxed until 1983 for up to 50% of benefits and there again in 1993 for up to 85% of benefits.
Unfortunately, those thresholds have been the same for DECADES and have not been adjusted for inflation.
Currently if your Combined Income as a Single filer is under $25,000 your benefits will not tax; those filing as Married – Joint are not taxed if their Combined Income is under $32,000.
Combined Income is a NET of: Adjusted Gross Income + Nontaxable interest + ½ SSA Benefits or if Mary has an AGI of $30,000 and receives $20,000 in SSA benefits that brings her combined income to $40,000 and she can expect to have up to 85% of her benefits as taxable.