Ask Liz Weston

Get smart with your money

Liz Weston

Is your ex alive? It matters when calculating these Social Security benefits

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Dear Liz: You say that people can receive divorced survivor benefits while remarried but only if they married at 60 or later. I am 75 and getting married soon. I hoped to continue to receive my deceased ex-husband’s benefits. We were married for 30 years. When I finally connected with an actual live person in the Social Security office, I was told that is incorrect and I will lose his benefits.

Answer: Social Security rules for spousal and survivor benefits are complicated. Divorce adds another layer of complexity. It’s understandable that many people get confused, but you’d hope the Social Security reps could get this right.

Divorced spousal benefits — the benefits someone gets from an ex’s work record while the ex is still alive — are what end when someone remarries. If your ex is dead and you receive divorced survivor benefits, you can continue receiving those if you remarry at 60 or later.

An aging father chafes at a daughter’s request for financial safeguards

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Dear Liz: I am 88. My wife who is 81 has Alzheimer’s but not so bad that we cannot do most things together as before. My younger daughter, an attorney, wants me to sign an agreement that will make it a little more problematic for me to access my substantial financial accounts. She thinks somehow I will get tricked into giving the money to some scam artist. I like the idea of being protected but do not care to have her being able to decide if I can spend my own money as I see fit. She says the document can be deleted by me at any time, but I still feel put upon.

Answer: Take this document to your estate planning attorney for a review. The attorney can help you assess whether this is the best approach or if there are other ways to keep you safe.

If you don’t have an attorney, get one. Estate planning is not a do-it-yourself endeavor when you’re both in your 80s and one of you has dementia.

You’re understandably in a “live for today” mode. You’re focusing, for example, on what you and your wife can still do, rather than on the cognition she’s lost or the losses yet to come. Your daughter’s focus on the future may feel like an imposition, but the reality is that you won’t become less vulnerable to fraud, scams and plain bad decisions as time passes.

This week’s money news

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This week’s top story: Things are getting better for home buyers. In other news: Full FAFSA launch by Dec. 1, all the fuss about tips and taxes, and weekly mortgage rates cool.

Buying a House in 2024: What’s Changed?
Things are (finally) getting better for home buyers. Here’s your playbook to navigate the remainder of an unpredictable year.

Full FAFSA Launch by Dec. 1: What Students and Families Need To Know
The 2025-26 FAFSA will fully launch by December, though some students will get access as early as Oct. 1.

What’s All the Fuss About Tips and Taxes?
Both presidential candidates have touted no-tax-on-tips pledges, but experts say it’s bad policy.

Weekly Mortgage Rates Cool; Metro Home Prices Hit Record Highs
While rates may be cooling slightly, home prices continue to heat up around the country.

Q&A: To lease or to buy a car, that is the question

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Dear Liz: You recently answered a question about whether to finance a car purchase. I bought a car in 1963 whose wheels couldn’t stay in alignment. By the time I had driven it 20,000 miles, I was on my third set of new tires. My next car had other repeated problems. Solution? Since then I have always leased and when the lease is up, I buy the car if it has been reliable. By then, the car is cheaper.

Answer: There are at least two ways to view your approach to cars. One is that you found an approach that suits you. The other is that you’ve been overpaying for vehicles for decades based on two long-ago experiences. Meanwhile, car reliability has steadily — and dramatically — improved.

Although there are exceptions, leasing is generally the most expensive way to pay for a car. And buying cars after the lease is over also can be problematic if the buyout price, which typically is set at the beginning of the lease, is higher than the vehicle’s market value.

On the surface, leasing can seem like a good deal. The car’s always under warranty and unlikely to need repairs. Lease payments are often lower than loan payments, since you’re not paying principal. That means you can drive a more expensive car than you could afford if you were paying cash or financing.

But that also means you don’t have any equity in the vehicle. Plus, leasing means you’re paying for cars during their first few years on the road, when they’re rapidly depreciating.

Sometimes manufacturers sweeten lease deals to make them less expensive than an equivalent loan, but usually you’ll pay a lot more over time leasing than you would buying.

Q&A: Eyeing a second divorce and the first ex’s Social Security

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Dear Liz: I was married for 12 years and have remarried. If I divorce again, am I eligible for my first husband’s Social Security?

Answer: People who were married for at least 10 years and who are currently unmarried may be eligible for divorced spousal benefits based on their ex’s work record. So if you divorce, you may be eligible for up to half of your first husband’s benefit at his full retirement age — assuming that this divorced spousal benefit is more than your own retirement benefit.

Applying before your own full retirement age means your divorced spousal benefit would be reduced. The benefit also would be subject to the earnings test, which reduces your benefit by $1 for every $2 you earn over a certain amount, which in 2024 is $22,320.

Q&A: What to do with a drawer full of unused credit cards?

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Dear Liz: At 75 and 79, my husband and I have no plans to buy a new car or property. We own our home and cars. We have excellent credit ratings. We use one major credit card. I’m consolidating our financial life for our heirs. We have a drawer full of cards we never use. Is there any reason not to just cancel these cards and save our heirs the trouble? Should I care if my 850 credit score tanks?

Answer: At this point, simplifying your finances probably makes more sense than trying to keep your credit scores as high as they can possibly be.

Cards you aren’t using still need to be monitored for fraud, which is a hassle, plus you may be paying unnecessary annual fees. Reducing the number of accounts should make your life easier, but don’t go too far.

As explained in previous columns, each spouse should have at least one card on which they are the primary account holder. A spouse who is an authorized user often loses access to the card when the primary account holder dies and card issuers close the account. Few credit card issuers offer joint accounts these days, so you should determine who is the primary account holder and who is the authorized user on each of your cards before deciding which to close.

You can reduce the damage to your scores by trying to preserve as much of your current credit limits as possible. Ideally, the cards you keep will be the ones with the highest limits. If you’re closing other accounts at your chosen issuer, you can ask that the credit limits for the shuttered cards be transferred to the card you’re keeping.