The Savings Game: Social Security regulations are complex
Social Security regulations are complex. I have been answering questions about Social Security for 15 years now, and it is not unusual for a reader to indicate that they have been misinformed by a Social Security representative.
If you believe that you have been given incorrect information, don’t hesitate to ask for a supervisor, or discuss the issue with a financial planner or CPA knowledgeable about Social Security issues.
Each month I read Heather Schreiber’s monthly column regarding Social Security regulations, which is published as one of the components of monthly information published by Ed Slott. I always learn something new when I read Heather’s column. Following is some information regarding Social Security you should be aware of.
Spousal benefits after divorce
In previous columns I have pointed out that after a divorce, as long as the marriage had lasted at least 10 years, the divorced spouse would be entitled to spousal benefits even if his/her spouse had not filed for Social Security benefits yet, even though he had at least ten years of service and had reached age 62. However, in this situation, Heather pointed out in her column, until her spouse filed for his benefits, the current spouse would not be eligible for spousal benefits until he filed for his benefits.
Benefits available to a divorced spouse that is not available to a current spouse: An individual who works under Social Security can have his/her benefits reduced when his earnings exceed specified limits. Another example is when he had received a previous overpayment of Social Security benefits. In this situation, the current spouse of the worker who had his benefits reduced, or eliminated, would also have her benefits reduced if she was entitled to benefits based on her spouse’s work record. However, a divorced spouse, who had been married for at least ten years and was receiving spousal benefits based on her previous marriage, would not lose any benefits in this situation.
Spousal and survivor benefits
When an individual who worked under Social Security files for benefits prior to reaching full retirement age (FRA), she can no longer receive a spousal benefit of 50% of her spouse’s Social Security benefit. When an individual files for her Social Security benefit early (prior to her full retirement age), her spousal benefit (not survivor benefit) is permanently reduced. However, as Heather pointed out, as I have also discussed in previous columns, a survivor benefit is based on the age of individual when she files for the benefits. If she has already reached full retirement age (even if she filed for a benefit based on her work record before reaching her FRA), she would be entitled to 100% of her spouse’s Social Security benefit at the time of his death. (The same benefit would be available to a former spouse whose marriage lasted at least 10 years, as long as she was single or re-married after age 60.)
Repeal of Government Pension Offset
In Heather’s recent column, she pointed out that prior to the legislation that repealed the Government Pension Offset, individuals who received a pension from work outside Social Security had their spousal benefit and survivor benefit reduced or eliminated. So, if you were informed by Social Security representatives prior to the repeal of GPO that you were not eligible for a spousal benefit or survivor benefit, you should file for those benefits now.
Bottom line: Social Security regulations are complex. Make sure you understand the benefits of Social Security regarding your work record as well as spousal benefits and survivor benefits. If you believe you need professional advice, don’t hesitate to contact www.irahelp.com for the assistance of a fee-based financial adviser in your area who can assist you. Too many individuals don’t maximize their benefits because they don’t understand the complex regulations associated with Social Security.
Elliot Raphaelson welcomes your questions and comments at raphelliot@gmail.com.