Overlooking Social Security Spousal Benefits Could Leave Him Clipping Coupons

April 5, 2021 – Naturally enough, most people concentrate their focus on their own Social Security retirement benefits. If they are careful, they compare the advantages of taking it early (as soon as age 62), waiting to Full Retirement Age (FRA, which is 67 for those born 1960 or later), or hanging in to get the maximum benefit at age 70. While it is great to know your own situation, most people overlook the importance of the benefits that might apply to their spouses. For some couples, particularly where one member earns much more than the other and Social Security will be the major source of income in old age, a bad decision can be disastrous down the road. This article will lay out the issues involved, so people can decide the best strategy for maximizing their Social Security spousal benefits.

There are two different scenarios to consider: spousal benefits while you are both alive, and survivor benefits when you depart this world. Let us take them one at a time.

1. Spousal benefits while you are both alive.

July 4, 2020 — Our friend Robert Powell at TheStreet.com just wrote a very helpful article for people who worked for governments or non profits and did not pay into Social Security for much of their work lives. They are usually concerned that they won’t get Social Security retirement payments. In “Did You Work for a Government and Not Pay Social Security“, Powell writes to straighten out some misconceptions.

The Windfall Elimination Provision (WEP) reduces your Eligibility Year (ELY) benefit amount before it is reduced or increased by early retirement, delayed retirement credits, cost of living adjustments (COLA), or other factors. If applied, your Social Security retirement payments will be lowered.

May 4, 2020 — When the coronavirus pandemic first arrived on our shores one of the first thing many people added to their list of worries was its potential effect on the viability of Social Security. Those of a negative mindset were drawn to two main concerns about its funding: shortfalls caused by the vast number of newly unemployed not making FICA payments, and new distributions made to people forced to take their Social Security retirement early at 62. The effect, they hypothesized, might be that the Social Security Trust Fund would become exhausted earlier than expected, and promised payments to retirees would have to be either trimmed or subsidized by the federal budget.

April 21, 2019 — Deciding when to take Social Security retirement benefits is always a complex question. Now the devastating impact of Coronavirus is making it even harder. Here are some thoughts that might help on a question that always has many possible answers.

The New York Times reports in “Taking Social Security During the Pandemic” that workers in the past decade have shown a steady trend of postponing when they take Social Security, as a way to increase their potential lifetime retirement benefits. Whereas most workers still take Social Security the first chance they get at age 62, to get higher benefits more and more have been waiting to their Full Retirement Age (66-67), or even to age 70. With the arrival of the coronavirus pandemic experts are wondering if that trend will stop, or even reverse itself.

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December 28 , 2019 — Social Security is the single most important source of retirement income for most people. So it is crucial that you understand how the rules apply to your situation.  Here are three important things you need to understand about how Social Security works.

1. Know when to claim

The earliest you can claim is age 62.  Your Full Retirement Age (FRA) is somewhere between 66 and 67, depending on your birth year (if born before 1954 it is 66 and increases one month per year after that up to 67). Your benefit maxes out at age 70; there is no advantage in waiting past that.  if you file at age 62 you will only get 75% of what you would get if you wait to your FRA. If you claim between your FRA and 70 your benefit will increase by 8% a year.  You can file for your benefits online or in person.

December 11, 2019 — You can always expect a lively debate on this subject: should you wait to claim Social Security, or take it as early as age 62? No matter your opinion, it is indisputable that claiming later than your Full Retirement Age (66 or later) provides an attractive 8% increase per year yield (plus COLA). Now a new study suggests that the 8% per year reward for waiting is too high, and the penalty for claiming early is too severe. Note: Shoutout to Maimi for bringing this study to our attention!

The study, “Are Social Security’s Actuarial Adjustments Still Correct“, comes from the Center for Retirement Research at Boston College. When Social Security started to allow beneficiaries to claim early or delay to age 70 it used actuarial adjustments designed to keep lifetime benefits constant for an individual with average life expectancy. In other words, no matter when you take your Social Security benefits, the odds are that you will receive the same amount of money.

November 18, 2019 — Late last month it was announced that Social Security and Supplemental Security Income (SSI) benefits for nearly 69 million Americans will increase 1.6 percent in 2020. This follows increases of 2.8 percent in 2019, 2% in 2018 and .3% in 2016. 

The 1.6 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 63 million Social Security beneficiaries in January 2020.

The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $137,700, up from $132,900. Separately, Medicare.gov announced that Part B premiums in 2019 will increase by $9.10 a month to $144.60 for most recipients.

November 16, 2015 — The biggest change affecting Social Security benefits in at least 15 years is about to go into effect on April 30, 2016. It is a change that could cost certain beneficiaries $50,000 over a lifetime. As with any major change to a benefit program there has been a lot of confusion over who is affected and how – this article will explain how it will affect you.

We were fortunate to have Kurt Czarnowski, a 34 year veteran employee of the Social Security Administration and leading expert on the subject, explain the changes to us in practical terms. Here is what we learned from Kurt about how various groups are affected.

File and Suspend and Restricted Benefit
The Budget Bill passed by Congress and signed by the President in early November included changes to (more…)

Note: This has become Module 8 of our Retirement 101 Online Retirement Course. We have written several other articles about Social Security you might also enjoy: “Social Security Quiz- A Learning Experience“, and “What Is Your Social Security Worst Claim Scenario”. Important changes to spousal claiming strategies occurred in 2016, these are referenced in our later articles.

April 24, 2012 — We were vain enough to consider ourselves experts on when and how to start collecting social security. That is, until we attended a talk last week in Old Saybrook, Connecticut by Kurt Czarnowski of Czarnowski Consulting. Boy, the things we didn’t know, and the others so misunderstood! This Module is Part 1 of a 3 Part Series. Here will give a brief background on Social Security and then dive into successful strategies for optimizing your return from this important safety net. Part 2 of this series concentrates on issues related to claiming strategies for couples, the rights of divorced spouses, and frequent misunderstandings/questions about Social Security. Part 3 explains “How to ‘Buy’ an annuity from Social Security”.

First, let’s start with a quote from Kurt Czarnowski: “The myths and misunderstandings about Social Security are staggering”. This from a man who spent 34 years within the Social Security Administration, the last of those as a Communications Director. Given all the misinformation, it is important that (more…)