Lynn Brenner's Family Finance

Does a Widow Lose Social Security If She Remarries?

Q:  If a widow and a widower who are both drawing Social Security survivors' benefits get married, are their respective benefits affected?-- RV, via email

 

A: It depends on how old they are.

If you remarry after age 60, you won't lose your widow or widower's benefit from a previous marriage -- a good reason to postpone the wedding bells if you're a year or two younger.

But remember, you can't collect more than one Social Security benefit at a time. If you become eligible for more than one benefit -- for example, in addition to a survivor's benefit based on a deceased spouse's record, you also now qualify for a spousal retirement benefit based on your new husband or wife's work record -- you'll receive the larger of the two amounts, not both.

Please send your questions to [email protected].  I'm sorry I can't respond personally to every email. Questions are only addressed online.

(c) Lynn Brenner, All Rights Reserved

 

No, Don't Take Social Security Earlier Than You Must!

Q: I'm 66 years old and as my deceased husband's widow, I've been receiving his Social Security benefit for 6 years. Now Social Security tells me I can switch to drawing my own benefit, and receive about $300 a month more than I'm currently getting. However, if I wait 4 years until I'm 70 years old, I'll receive $892 a month more. I calculate that if I wait the 4 years, it will take me 23 months after I turn 70 to break even.

I feel like waiting, but my planner told me to take it now. I know each case is individual, but are my calculations correct? --AA via email

 

A: Follow your instinct and postpone taking your own benefit until you're 70 years old.

You've actually overestimated how long it will take you to break even. I make it 16 months, not 23 months. Barry C. Picker, a certified financial planner who's also a CPA, confirms the accuracy of my calculation.

Here's how I crunch the numbers:

If you take your benefit now, you'll gain an extra $300 a month for four years. That adds up to $14,400. To find out how long it would take you to collect that $14,400 if you delay your benefit until age 70, and then start it getting $892 a month more, I divide $14,400 by $892.

The result: 16 months.

But my advice would be the same if it took 23 months to break even.

Your Social Security benefit grows a risk-free 8% a year for each of the four years you delay taking it between ages 66 and 70. If you took your benefit now and invested the extra $300 a month for four years, no way could you expect to earn 8% a year on your money -- let alone in risk-free investments! If your financial adviser suggests otherwise, you need a new adviser.

And what's the downside of waiting? True, there's always the risk that just six months after you start your benefit at 70, you're hit by a bus and die. In that case, you will have lost financially.

But the biggest risk most of us face isn't dying early. It's living much longer than we expect. If you're healthy at 66, you're very likely to live well into your 80s and possibly into your 90s. And maybe to 100.

The easiest, surest, and least expensive protection against longevity risk is to maximize your Social Security benefit,  a stream of lifetime income that's adjusted annually to keep up with inflation. (It's the cheapest annuity in town, explains Alicia Munnell, the director of the Center for Retirement Research at Boston College.) With a 32% boost in your initial benefit, your annual inflation adjustments are calculated on a much larger amount. The upshot: You'll receive a substantially bigger monthly amount in your later years.

And in your case, it's clear that you won't suffer current financial hardship by postponing your benefit.

"The fact that you've indicated you want to wait means you don’t need the larger benefit now, and are more concerned about the future," says Picker.  "You will be more comfortable, from a piece of mind point of view, knowing you have the extra income in your later years."

He recommends collecting your widow's benefit until 70 and then switching to your own.

The clincher: this is a decision you can revisit anytime during the next four years. If you change your mind, you can switch to your own benefit sooner if you feel it's necessary.

Please send your questions to [email protected].  I'm sorry I can't respond personally to every email. Questions are only addressed online.

(c) Lynn Brenner, All Rights Reserved

Can I Get Social Security on My First Husband's Record?

Q: I am 59 years old.  I was married to my first husband -- the father of my two children -- for more than 10 years. He is now deceased, and we were divorced at the time of his death. 

I remarried and divorced twice after that first marriage, but each of my two other marriages lasted less than 10 years. I've been unmarried for the past 14 years.

On the Social Security  website, it states that I would be eligible to draw a survivor's benefit from my first marriage even if I had remarried, provided I am not married at the time I apply for this benefit.  

I called the SS office and was told I would not be eligible for the survivor's benefit because I had remarried. The woman I spoke with said that I would only be eligible a benefit on the last husband's record --  but we were only married for two years and he is alive and well.  She also told me to check with my local office to see if they can tell me I am eligible. 

The website states that a survivor's benefit can be applied for at age 60.  I may be unemployed in another year, and I was hoping the person I spoke with on the phone is wrong. -CP via email

 

A:  She was wrong, but her advice was good. Clearly, she suggested you check with your local Social Security office because she herself wasn't sure of the answer.

The information on the website is correct: You are eligible for a survivor's benefit based on your first marriage if it lasted at least ten years and you're unmarried when you file for that benefit.

It doesn't matter that you had two subsequent marriages between the end of your first marriage and your application for a survivor's benefit.

In fact, if your second marriage had also lasted 10 years, and your second husband was also deceased, you'd qualify for a survivor's benefit from either of the two marriages, and you could apply for the larger of the two.

The earliest you can apply for a widow or widower's benefit is age 60. If you apply at 60, you will get a reduced amount. To receive the maximum benefit --100% of the amount your deceased first husband would be eligible to get at his own full retirement age -- you'd have to delay your application until you're 66 years old.

But what you can do is take the reduced survivor's benefit at age 60, and then at age 66 switch to your own full Social Security benefit if that's a larger amount. (For more information about the options available to people who are collecting a widow's or widower's benefit, see this earlier post.)

Make an appointment at your local Social Security office as the telephone representative suggested, and take a print-out of the information you found on the Social Security website with you. Be polite, patient, and persistent -- and if necessary, ask to speak with a supervisor.

 Please send your questions to [email protected].  I'm sorry I can't respond personally to every email. Questions are only addressed online.

(c) Lynn Brenner, All Rights Reserved

 

 

Collecting Social Security On An Ex-Spouse's Record

Q: I worked alongside my husband in our own business.  I took very small wages ($12,000 annually) and he took around $100,000 annually. Fifteen years ago, he fell in love with a 25 year-old and left our family.

I started collecting my Social Security benefit when I turned 65, and it is indeed very small.

When I speak with Social Security, they say they can’t tell me what my ex’s Social Security is for privacy purposes. I have been reading all of your options but not knowing if he is already collecting Social Security and if so, how much, I cannot make a decision which direction to go for my own Social Security. I really need an idea who could give me the information that I need. -- KM, via email

 

A: The Social Security Administration has the relevant information, and they will give it to you.

You may be entitled to a bigger benefit check. But you don't have any options to consider or decisions to make. The reason is that you're already collecting Social Security. Social Security options are only available to people who have reached their full retirement age and haven't yet filed for their benefits.

You've left out the two most important pieces of information, which are your ex-husband’s current age, and how long you were married. The fact that he remarried – I'm assuming he and that 25 year-old tied the knot – is irrelevant. Whether or not he is currently collecting Social Security is also irrelevant.

If your marriage lasted for at least ten years and you haven’t remarried, you are entitled to a spousal benefit based on his work record.

If you were still married to him, you couldn’t collect your spousal benefit until your husband had filed for Social Security. But the rule is different for people who are divorced. As a divorced person, you’re eligible as soon as your ex is old enough to collect Social Security -- even if he hasn’t filed for it – as long as you’re at least 62 years old, you haven’t remarried, and your own benefit is smaller than your spousal benefit.

For example, if you meet the other tests but your own benefit is $1,000 a month and your spousal benefit is $900 a month, you won’t receive any spousal benefit. The maximum you can receive is whichever amount is greater – your own benefit or your spousal benefit.

Assuming your ex was at least 62 years old when you applied for Social Security, you were eligible for both your own benefit and a spousal benefit based on his record. You should therefore now be collecting the greater of those two amounts.  

If your current benefit check doesn't reflect your spousal entitlement, it may be because you didn’t mention your ex to Social Security when you applied for your benefit. Or perhaps he was still under 62 at that time. Or -- less likely, but still possible -- you dealt with a Social Security representative who didn't know the rules. If any of those things happened,  you may be getting a smaller amount than you’re entitled to receive.

Make an appointment at your local Social Security office to discuss this situation. A face to face meeting is much better than a phone conversation. Take along a copy of your marriage certificate and a copy of your divorce decree. It’s useful to have your ex’s Social Security number (which you’ll find on copies of your old tax returns), but it’s not essential. The Social Security Administration can retrieve it.

They can tell you what your spousal benefit is, and whether that benefit is reflected in your current check. If not, you're entitled to have your benefit adjusted.

Two last thoughts:

Even if you never got a divorce and he hasn't yet filed for Social Security, you're entitled to know what your spousal benefit will be when he does file, and whether or not it will increase the size of your monthly check. 

And whether or not you ever got divorced, when this guy dies -- again, assuming your marriage lasted at least 10 years and you haven't remarried -- you can collect 100% of his Social Security benefit as his widow.  That's true no matter how many young women he may have married since he left you.

Please send your questions to [email protected].  I'm sorry I can't respond personally to every email. Questions are only addressed online.

(c) Lynn Brenner, All Rights Reserved