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Liz Weston

Q&A: How “deeming” works for Social Security spousal benefits

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Dear Liz: I will be turning 64 next year and my wife will be turning 62. I plan to wait as long as I can to file for my Social Security, hopefully till 70. My benefit at full retirement age (age 67) is around $3,400 monthly and my wife’s is about $1,100. Half of my benefit will always be higher than hers, even if she waits until age 70 to file. Can she file for early benefits next year (around $800 a month), then switch over to half of mine when I finally file? Will the ‘deeming’ rule affect this? Will she actually get half of mine if she files early?

Answer: If you had already started receiving your benefits, your wife would be “deemed” to be applying for both her own benefit and her spousal benefit and would be given the larger of the two. She couldn’t apply for just one, and there would be no switching later.

Because you haven’t started yet, though, the spousal benefit hasn’t been triggered. The only benefit she can currently apply for is her own. When you apply, the spousal benefit will become available and she will be switched to that if it’s larger (which sounds like it will be the case).

Spousal benefits can be up to half of what the primary earner would get at full retirement age, but the amount is reduced when started early. If you apply for benefits before she reaches full retirement age, in other words, her spousal benefit would be less than 50%.

Plus, any benefit started before the applicant’s full retirement age is subject to the earnings test, as described above.

Because so many different factors are at play, it could make sense to use one of the paid Social Security claiming strategy sites such as Social Security Solutions or Maximize My Social Security.

Q&A: How should I receive Social Security survivor benefits?

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Dear Liz: I am 68 and still working. I plan to wait until age 70 to maximize my benefit before taking Social Security. My spouse (born in 1956) passed away in 2018 after just beginning to draw her Social Security benefits at age 62.

Even though I was the higher earner, I believe that I can draw survivor benefits now from my wife’s Social Security if I apply. I also believe that I can switch to my own benefit when I turn 70, and my benefit would then be higher.

But I cannot find an answer to whether, if I did such a switch at age 70, my benefits would be at maximum because I waited until age 70, or would be less than the maximum because I started taking my wife’s survivor benefits or even worse, because my wife started benefits early. I see many articles that dance all around this question but never answer it. Can you please be the one who answers this question?

Answer: Social Security can be incredibly complex, with different rules applying depending on age, marital status and the type of benefit involved. Survivor benefits have different rules than spousal benefits, for example, and both work differently from the retirement benefit people earn on their own work record. You’re smart to want to understand exactly how the rules affect your individual situation before applying.

You are correct that you can apply for survivor benefits now and then switch to your own retirement benefit when it maxes out at age 70. Your retirement benefit will not be reduced because you collected survivor benefits first, or because your wife started her benefit early.

However, your survivor’s benefit will be smaller than it might have been because of her early start. The survivor benefit is determined by what the deceased spouse was receiving at the time of death.

Survivor benefits can begin as early as age 60, or 50 if the survivor is disabled, or at any age if the survivor cares for minor or disabled children from the marriage.

But starting early would have further reduced your benefit, plus you would have been subject to the earnings test, which withholds $1 for every $2 you earn over a certain limit (which in 2025 is $23,400). The earnings test goes away when you reach full retirement age, which for someone born in 1957 is 66 years and 6 months.

There was no benefit to delaying your application past your full retirement age. That means you’ve missed out on several months of survivor benefits you could have been receiving. You can get six months of back benefits when you apply, but that’s the limit.

Q&A: Can I simplify my finances without hurting my credit score?

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Dear Liz: I’m 75 and getting forgetful and disorganized. My prior excellent credit rating has suffered due to late payments because of this. I’d like to simplify my finances by getting rid of extra credit cards, but this will negatively affect my rating even more. Why isn’t there some means for elders to simplify their finances without negative consequences? Some may ask why I care about my credit rating at my age. Well, if there was a major quake and I needed to borrow money to rebuild my condo, it would be important.

Answer: It’s not always possible or even desirable to maintain the highest possible credit scores. Sometimes, other factors must take precedence.

In your case, the most important consideration is making your finances more manageable. You’re correct that cancelling cards could further damage your credit scores, but the impact should be temporary as long as you responsibly handle the cards you keep.

Consider hanging on to one or two cards with the highest credit limits. Credit utilization, or the amount of your available credit that you’re using, is a big factor in credit scores so you’ll want to keep high credit limits if you can. If you’re closing other cards with the same issuer, ask that your credit limit from the closed cards be transferred to the card you’re keeping.

Also, set up automatic payments so that you never again miss a payment. You typically can set up automatic payments to cover the minimum balance, the statement balance or a fixed dollar amount. You can do this online or with a phone call to the issuer.

You should have a document known as a power of attorney that designates someone to handle your finances should you become incapacitated. You’d be smart to start involving that person now so that they’re familiar with what needs to be paid and when. This person could help make sure you’re keeping up with your financial tasks and could take over if you’re feeling overwhelmed.

If you don’t have such a person in your life, please investigate your options. An estate planning attorney or tax pro might have some recommendations, or you can check out the services of a daily money manager. You can learn more at the American Association of Daily Money Managers.

Q&A: Don’t be overly fearful about closing credit cards

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Dear Liz: You recently advised a couple who have excellent credit, no outstanding loans and a low credit utilization rate that they could close their credit card with a company that keeps reducing their credit limit when they don’t spend enough on their card. The writer has to contact the credit card company every time to get it restored to its original credit card limit. You suggested they could close their account but you didn’t address their question about whether they’d be better off settling for a reduced credit limit. Wouldn’t a reduced credit limit harm one’s credit scores less than closing an account?

Answer: Probably, but the point was that closing the account was unlikely to do significant or lasting harm as long as they had other credit cards. The couple could make the effort to try to keep the account open, but the hassle might not be worth the limited benefit to their credit scores.

People with excellent credit are often overly fearful about closing credit cards. It’s true that you generally should avoid closing accounts if your scores aren’t great or if you’re in the market for a major loan, such as a mortgage. It’s also a good idea to keep a big gap between the amount of credit you use (your balance) and the amount you have (your credit limit). That could mean hanging on to your highest-limit cards or having the credit limit of a card you’re closing transferred to another card you’re keeping.

But you shouldn’t be afraid of closing accounts if you have a good reason to do so.

Q&A: RMDs gave me permission to retire

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Dear Liz: When Roth conversions came along, they were touted as a way to avoid taxable required minimum distributions in retirement. I had built up a solid “traditional” account, and saw no reason to add to my tax bill by converting. I ignored the noise, although I did open and contribute to a Roth account in addition to my traditional IRA.

Now in my 70s, living on Social Security, RMDs and some investment income, I’m grateful I blocked the noise. In fact, I have the RMD income to thank for getting me to realize that I could afford to retire. If I’d converted, I’d probably still be working and afraid to spend my tax-free Roth. And it turns out the tax bite on the RMD isn’t all that bad.

Answer: Thanks for sharing your perspective!