I get a number of questions about Social Security and which benefit to claim. With 567 different strategies, no wonder there is confusion. Today I offer two frequently asked questions:
I’m divorced. Can I collect Social Security off my ex-husband’s record?
Yes, if the marriage lasted at least 10 years and you are currently unmarried. Your ex-husband must be at least 62. If it’s been more than two years since the divorce, he does not need to have filed for his benefit. The same rules that apply to spousal benefits also apply to divorced-spouse benefits. If your own benefit is higher, that’s the amount you will be paid. However, if you were 62 or older at the end of 2015, you can file a restricted application for your divorced-spouse benefit when you turn 66 and receive 50 percent of your ex-spouse’s PIA from age 66 to 70 while your own benefit grows by 8 percent a year. At 70, you can switch.
My husband has died. When will I be eligible for a survivor benefit?
You can start your survivor benefit as early as age 60, but it will be reduced. There are two components to the survivor benefit. The first is what’s called the “original benefit.” This is the amount based on the decedent’s PIA or his actual benefit if he has already started receiving his benefit. The second is the “actual benefit” which is based on when the surviving spouse claims it.
Example: Let’s say Mike is 70 and Mary is 60. Mike has delayed his benefit to age 70 and is receiving $3,000 at the time of his death. This becomes the original survivor benefit. It’s the amount Mary will receive if she claims it at her full retirement age. However, if Mary claims it now, at age 60, the original benefit will be reduced to 71.5 percent, giving her a permanent benefit of $2,145.
Savvy Social Security planning for couples usually involves the higher earning spouse claiming his benefit at age 70 in order to maximize the survivor benefit in case he dies first. At that time, the surviving spouse would step into his higher benefit and her own benefit would stop.
Savvy Social Security planning for widows and widowers involves coordinating the person’s own retirement benefit with the survivor benefit. It is possible to sequence these benefits to maximum advantage. Talk to your financial advisor or the Social Security Administration if you are eligible for both a survivor benefit and a retirement benefit based on your own work record.
Mark Singer, CFPⓇ, lives in Swampscott and has been in the financial industry for over three decades. If you have any questions contact him at 781.599.2660 or firstname.lastname@example.org. The content was developed in conjunction with Elaine Floyd, CFP®.