Confused About Social Security – Including Spousal Benefits, Claim Strategies, and How Death and Divorce Affect Your Monthly Income?

MarketWatch’s Help Me Retire column typically answers one reader question at a time, but many readers had short, specific questions about their Social Security eligibility and potential benefits. As is often the case with questions about social security, the answers depend on many variables. “Many factors can change the rules used to determine benefit amounts,” said Diane Wilson, founding partner of My Social Security Analyst.

MarketWatch spoke with financial experts about claims strategies and monthly benefit rules.

See: I’m 60, my partner is 45 – can I retire if our expenses are $ 12,000 per month?

Question: I am 75 years old and I started receiving Social Security benefits at 63. My wife is 77 and also started receiving her benefits at 63. During our working years, my income was significantly higher than his, so my Social Security benefits are more than double his. Should she be able to obtain social security benefits (spouse) equivalent to half of mine?

Reply: Spousal benefits can be complicated. Technically, she should be able to claim excess spousal benefits from Social Security, which would potentially increase her payment, but that may not be half of your benefit. She claimed her social security benefits before full retirement age (FRA), just like you, which means they are already reduced as is.

It can’t hurt to check with the Social Security Administration, said Laurence Kotlikoff, professor of economics at Boston University and president of Economic Security Planning, a software company. She should call and ask her if she is entitled to excess spousal benefits.

Question: I plan to retire at 63 and my wife at 62 in a few years for both of us. My expected benefits are $ 2,047 per month and my wife’s are $ 1,232. Fortunately, we have other forms of income as well, i.e. 401 (k) and county pensions that we are already making. The question I have is as I understand it – when I die my wife’s benefit will increase to match my distribution of $ 2,047 per month, but although it is an increase, she loses her distribution personal and so it’s actually a loss of income, because between the two of us, our Social Security was $ 3,279. With my death, she will only receive $ 2,047. On the other hand, it’s worse for me when my wife dies, since her advantage is less than mine, I don’t get anything more. Am I correct in understanding how this works?

Reply: Yes and no. If you were to die first, your wife would keep her benefits, but get an increase in what she receives. If she were to die first, you wouldn’t get any additional benefits.

When you claim to make a difference in those numbers, however, said Mike Piper, author of “Social Security Made Simple” and creator of Open Social Security, a calculator to help users craft their Social Security claims strategy. If you file your return much earlier than your AIF, your benefit and his spousal benefit would be affected. When you die, it can also affect calculations, Kotlikoff said. “The widow’s quarter is the most complicated,” he says. Kotlikoff’s company creates financial planning programs, including Maximize My Social Security, allowing users to tinker with various variables, such as age at time of application and death, to determine possible benefit amounts.

Here are some rules, however. If you apply for benefits before full retirement age and she applies for the widow’s benefit at full retirement age, she is entitled to the greater of what you received or 82.5 % of what you would have received at FRA, Wilson said. If she falls under the FRA when applying for these widow’s benefits, there are three amounts to be determined: what you were getting, 82.5% of your FRA, or a reduced widow’s benefit.

Now, if you were to apply for benefits at full retirement age (which would mean delaying your scheduled claim, depending on your question), and she is at her FRA or older when she is applying for widow’s benefits, she would get what you received or what you were supposed to receive when you died. If she was under her FRA at that time, she would get a reduced benefit based on the number of months before her FRA when she claimed the widow’s benefit, Wilson said. “In this case, it may be advantageous to take advantage of her benefit until it is FRA and then switch to the widow’s benefit.”

Also see: I am a 57 year old nurse with no retirement savings and want to retire within seven years. What can I do?

Question: I will be 67 years old next February. I want to retire at that time. My husband filed for divorce over 20 years ago and has since remarried. I never remarried. My ex-husband will be 64 in June. Can I claim part of his social security every time he retires, even if I retire before him?

Reply: There are some eligibility conditions to receive social security benefits as a divorced spouse who has not remarried: you must have been married for 10 years, he must be at least 62 years old and if he has not remarried. still claimed his benefits, you must have been divorced for at least two years. The fact that he remarried does not affect your ability to claim his benefits.

If you tick all of those boxes, you’re entitled to half of her Primary Insurance Amount (PIA), which is her benefit at her full retirement age, Piper said.

But keep in mind that there are a few more rules. If you were born after January 1, 1954, you must claim your own Social Security benefits when you go to claim yours. You may be entitled to certain ex-spouse benefits if the amount of your primary insurance (which you get at FRA) is less than half of your ex-husband’s benefits at full retirement. Your case is unique because you will file your claim at age 67, making your benefit higher than what your benefit would have been at your full retirement age, Wilson said. The Social Security administration will use this amount in place of your FRA benefits, which may mean that you will end up with more than half of your ex-husband’s benefit, she said.

Here’s how the Social Security Administration allocates benefits for divorced people.

Question: I will retire at the end of this year at 65 years and 10.5 months. I wonder if casual work during retirement would reduce my Social Security benefits. I plan to wait to claim Social Security benefit payments until age 70. My average taxed earnings for the last 20 years were $ 107,000 and the average for the previous 15 years was $ 51,000. If I were to work for my employer as a temp or contractor occasionally during retirement, such as earning $ 10,000 a year for two or three years, would that end up reducing my benefit payments or would it have no impact?

Reply: While low income can affect your private pension benefits, it will never lower your Social Security benefits, Piper said. The Social Security administration looks at the top 35 years of income, so what you earn in the most recent years will only impact your benefits if they were more than one person’s income. of these 35 most important years. You will also get more than your primary insurance amount by deferring your benefit to age 70, which is always a good addition to your monthly income.

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