We all should be smart enough to not get sucked into articles which claim to reveal the secrets of whatever. But we all retain the small hope that one of the articles will reveal some piece of information that will change our lives. There are no secrets of Social Security, but there are details. Chances are you just haven’t taken the time to learn the details.
Which is interesting, right? Social Security is something you contribute to for your entire working life and it’s likely your retirement plan will rely on it heavily, yet you probably know next to nothing about it. There are so many facets of Social Security you likely don’t know about so I wrote my Indy Star column highlighting a few of them. These aren’t secrets, but they are details of Social Security you may not know.
“Many divorcees are surprised to learn that even though their marriage is over, their financial relationship with their ex-spouse is not. In fact, as long as a divorcee is over the age of 62 and hasn’t remarried, they can claim social security retirement benefits on their ex-spouse’s account. The claim can take place if the divorcee isn’t currently remarried, even if the ex-spouse is re-married. And whether you like it or not, claiming your ex-spouses social security retirement benefits doesn’t negatively impact your ex-spouse. The prospect of this strategy gets a little more exciting when you discover that you can claim your ex-spouse’s social security benefits, and allow your own social security benefits to continue to accrue. You can claim theirs, allow it to positively impact your financial life, and then later receive your social security benefit on a more permanent basis.” (courtesy of the Indy Star)
Then there’s “file and suspend.”
“This is very similar to claiming your ex-spouses benefit when you are full retirement age, but in this instance, you have to (get to) still be married. At full retirement age, one person files for their benefit, immediately suspends receiving benefits, and then the spouse makes a spousal claim for 50% of the filers benefit. All the while, the original filers benefit accrues at a 7% clip per year, and then flows back to the retiree at age 70. This is a great strategy for healthy couples that can afford to delay full retirement benefits. Couples, in a way, can have their cake and eat it too.” (courtesy of the Indy Star)
This last detail, is one that’s the most impactful. The survivors benefit is one that is highly underutilized.
“Minor children are eligible to receive a rather substantial monthly social security benefit, in the event of a parents’ death. When a young child loses a parent, the chaos that often ensues prevents the remaining adults from making the claim on behalf of the minor children. Unfortunately, a claim must be made. Checks just don’t start showing up. While life insurance is the perfect way to ensure financial stability upon a parent’s passing, social security survivor benefits are pretty darn good too.” (courtesy of the Indy Star)
Like I said, these aren’t secrets, they are just details. You pay into Social Security with each and every paycheck, so it’s a good idea to learn more about it. Visit SSA.gov, to learn more about your rights. The “secrets” are there for you, you just have to take the time to learn about them.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.