GOSS: Maximizing Social Security

This is the fifth article in a series that will help you answer the question “Can I afford to retire?” I get a lot of questions about Social Security, so I want to cover a few things for you to consider before you apply. If you visit the website www.ssa.gov, you can click on “My Social Security” and create a user name and password. This allows you to see your most current benefit projection, which will tell you what you could receive if you started taking your benefit early at age 62, at full retirement age, or at age 70. What it does not show you is how a married couple can maximize their benefits.

Here’s an example. Jim and Jane are both age 66, which is their full retirement age. Jim worked longer and earned more than Jane, so his benefit is larger. Let’s say his benefit at full retirement age is $2,500, and Jane’s is $900. However, if he applies, then she applies at the same time for a spousal benefit, she can receive a benefit in the amount of half of his benefit. If they had applied at age 62 this would not have been possible, as Jane would have had to apply for her own benefit, and both her benefit and any spousal benefit she could receive would be reduced. Jane has to apply for the spousal benefit at her full retirement age to get a benefit in the amount of half of Jim’s. And if Jane applies for spousal benefits, this does not reduce Jim’s benefits in any way.

The spousal benefit is also available to divorced spouses if the marriage lasted 10 years or longer, and if the spouse is unmarried, age 62 or older, and the ex-spouse is entitled to Social Security retirement or disability benefits.

Remember, though, that you have to wait until full retirement age to get a benefit equal to half of the ex-spouse’s benefit. Divorced spouses need to bring proof of the marriage and divorce to the Social Security office to apply, and the ex-spouse is not notified of this application.

Another thing to consider is the Social Security survivor benefit. Statistically, Jane could outlive Jim by seven years.

So, another option is for Jim to “file and suspend” his Social Security benefits at age 66. This allows Jane to apply for spousal benefits, then Jim applies for a larger benefit at age 70.

This way, if he pre-deceases Jane, she can switch from receiving her benefit to his larger benefit as a surviving spouse.

The survivor benefits also are available to divorced spouses who were married at least 10 years and are either currently unmarried or re-married after age 60 (age 50 if disabled). Visit the website www.ssa.gov to learn more. Making good decisions about how you apply for Social Security can have a big impact on your retirement future.

Sherri Goss is vice president of Rosenberg Financial Group Inc., with offices in Macon and Warner Robins. You can reach her by calling 922-8100, or by email at sherri@rfmoney.com.

This story was originally published August 25, 2015 at 10:30 PM with the headline "GOSS: Maximizing Social Security ."