Q&A: Spousal benefits get complicated by divorce, death


Source: www.usatoday.com

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Q&A: Spousal benefits get complicated by divorce, death

Q101: My sister is 64 and divorced but was married for 30 years. Her ex-husband is 61. When can she start drawing on his Social Security or when is the best time for her to do so? She worked for only 12 years at minimum wage. He may retire early. Can she collect her Social Security, then switch over to his when he retires? – Caryn Cyr

A: Your sister will become eligible for a divorced-spouse benefit as soon as her ex-husband turns 62 — assuming they will have been divorced at least two years at that time, says Elaine Floyd, a certified financial planner and director of retirement and life planning at Horsesmouth, a New York City-based financial education firm.

One option: She could file for her own reduced benefit now and add on the reduced spousal benefit when her ex-husband turns 62, says Floyd. Assuming her primary insurance amount (PIA) is less than one-half of her ex-husband’s PIA, Floyd says this will give her a combined benefit of 40% to 45% of his PIA.

For the maximum benefit, however, she should wait until she turns 66 to file. This will give her a permanent benefit of 50% of his PIA, plus annual cost-of-living adjustments, Floyd says.

Q: My husband is 68 and has been collecting Social Security since he was 65 on his previous wife’s earnings; the widower option I think is what it is called. She was six or seven years older than he. I will be 62 in November. How can I maximize my Social Security benefit? I am still working full time but that may end next year. I may or may not look for another job. If I file and suspend until I am 66 (or older), would I be able to receive Social Security benefits based on what he would have been paid on his earnings or based on what he is receiving based on his first wife’s earnings (which are higher)? – Roberta Browning

A: Unfortunately, to get the answer, we need a little more data. “Making the right decision about Social Security filing is like moving a set of interconnected gears,” says Dave Freitag, a financial planning consultant with Mass Mutual Financial Group in Springfield, Mass. “When you move one gear it moves a second gear which, in turn, moves a third gear.”

So, to answer your question, we need the specifics about the benefit amounts. What is your benefit at your full retirement age? How much is your husband’s survivor benefit from his ex-spouse? How much is his benefit from his own record? How much income are you making now? How much might you make if you go back to work before your full retirement age? What is your health now and is there longevity in your family history? What is your economic need now and do you have other assets to fill in the gap if you want to delay taking Social Security?

All that said, Freitag says that today you cannot “file and suspend” your own benefit because the Social Security filing laws changed.  The grandfather provisions of the Bipartisan Budget Act of 2015 do not protect someone who turned 62 this year. The “file and suspend” strategy is now off the table for younger workers.

If she wants benefits before her full retirement age, her choices are quite different and dependent on the answers to the questions listed above,” says Freitag. “Keep in mind that all of this information is interrelated and needed to come up with the ‘right answer.’ I have a saying about making a Social Security filing recommendation. That saying is ‘one size fits one.’ You cannot apply general rules and always get the right answer. Remember when you turn one gear in this decision matrix, you will also turn several others at the same time.”

How the Law Office of Scott A. Ferris, P.A. Can Help

If you, a friend or a family member find themselves in a situation such as this, please call the Law Office of Scott A. Ferris, P.A. at 305 670-3330 right away. Scott A. Ferris, Esq. is a licensed family law attorney who has been practicing law since 1987. He is available whenever you need him to defend your rights. Please learn about our firm at www.FerrisLawFirm.com.

Republished by the Law Office of Scott A. Ferris, P.A.

 

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