Women & Wealth: What are my best options for social security?
Social security retirement benefit rules seem to change every few years so where are we now and what’s out there that can be beneficial for your specific situation? There are different rules and benefits for women that are divorced and widowed. There are also some different rules for women that are married that may be beneficial if your retirement benefit is less than your spouse’s benefit. And, there may be a beneficial way to file if you are retired, but your spouse isn’t yet. So, let’s cover all of the above.
- Divorced: If you are divorced and were married to your previous spouse for 10 years or more you may be eligible for your ex-spouse’s benefits if:
- You are unmarried
- You are age 62 or older and your ex-spouse is eligible for social security benefits
- Your ex-spouse does not have to file beyond two years after divorce
- And, if your benefit is less than your ex-spouse’s benefit
- You are eligible to receive one-half of your ex-spouse’s full-retirement benefit if you start collecting at your full-retirement age. If you were born before January 2, 1954 and are already at full retirement age you can choose to receive your ex-spouse’s benefits now and delay receiving your benefit until a later date. Please see the IRS website for more info: https://www.ssa.gov/planners/retire/divspouse.html
- Widowed: If you are a widow then you may be eligible for survivorship benefits at retirement and before retirement; please see the rules below:
- If you are widowed and have been married for 9 months or longer and have dependent children (that are the deceased dependent children) under the age of 16 then you are eligible for survivorship benefits. These benefits are 75% of the deceased full benefits
- The deceased person’s children are also eligible for survivorship benefits up until age 18 or until high school graduation at 75% of the full retirement benefits as long as the deceased parent hasn’t already started receiving retirement or disability payments. If so, then the survivorship benefit is 50%.
- A surviving spouse may start collecting retirement benefits from their deceased spouse at age 60 as long as the widow is not married or age 50 if the surviving spouse is disabled. Collecting at age 60 or 50 will reduce the overall benefits by 71 ½% to 99% depending on when you take it
- A surviving spouse may collect benefits at age 60 and then switch to their own record at age 62 if their own benefits are larger than their deceased spouse
- If a surviving spouse gets married after age 60 then their survivorship benefits are not compromised
- If you become a widow after you and your spouse are taking social security benefits you will receive the higher benefit of the two
- If you would like to read more about survivorship social security benefits please refer to the social security website: https://www.ssa.gov/planners/survivors/ifyou.html
- Married options:
- There is something call a “restricted application” with social security that allows a spouse to file and receive a portion of the other spouse’s benefit while allowing their own retirement benefit to increase. This option is for retirees born before January 2, 1954 and already have reached full retirement age.
- At full retirement, if your retirement benefits are lower than half of your spouse’s benefits then you will receive your benefits plus a portion of your spouse’s benefits, but you are not eligible for any delayed retirement credits from your spouse.
- For more information please go to: https://www.ssa.gov/planners/retire/applying6.html.
- Basic Social Security Benefit options:
- You can start drawing your social security retirement benefits at age 62, but your benefit will be reduced by 30% at that age, 25% at age 63, 20% at 64, 13.3% at 65 and 6.7% at age 66. (This scale is for individuals that are at full retirement at age 67) https://www.ssa.gov/planners/retire/retirechart.html.
- If you start drawing your benefits prior to full retirement age, then your benefits will be reduced if you earn more than $17,640 a year as W2 income. Please see this webpage to get all of the details of this calculation https://www.ssa.gov/planners/retire/whileworking.html.
- If you start drawing your benefits at your full-retirement age then you can earn as much as you would like without your benefit being reduced.
- You also have the option to delay your benefit until age 70. Your benefit will increase by 5.5% to 8% a year based on when you were born. https://www.ssa.gov/planners/retire/delayret.html.
- Once you decide when you want to start your retirement benefits you should apply four months before then. You can give social security a call, schedule an appointment or go online. I would go to this website for more information on how to apply. https://www.ssa.gov/benefits/forms/.
- Social Security & Medicare Expert: Cindy Lundquist
- We have developed a relationship with Cindy Lundquist; a social security and Medicare consultant who has spent over 25 years working in the social security office.
- Her services are free of charge for our clients. She has helped several of our clients decide when it’s the best time to start their benefits especially based on income, spousal benefits and the breakeven point.
- Please check out her website: https://cindylundquist.com/.
Thank you for reading; I know this is a lot of information and it can be overwhelming. If you are interested in discussing your social security options with us please let us know; we are happy to help and happy to bring Cindy Lundquist into the fold.
CERTIFIED FINANCIAL PLANNER™
The material is general in nature. This information is not a complete summary or statement of all available data necessary for making a decision on Social Security. Prior to making a decision, please consult with your financial advisor about your individual situation.
Raymond James is not affiliated and does not endorse the opinions or services of Cindy Lundquist.
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