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Liz Weston

Tuesday’s need-to-know money news

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Today’s top story: Buy a real car now before they become extinct. Also in the news: How Shea Couleé of ‘Drag Race’ fashions her finances, 8 credit card strategies, and 3 things to do when you get a salary increase.

Buy a Real Car Now Before They Become Extinct
Sedans are disappearing.

Money/Makers Q&A: How Shea Couleé of ‘Drag Race’ Fashions Her Finances
Drag isn’t cheap.

8 Credit Card Strategies — And Some Surprises, Too
Strategic uses to improve your life.

3 Things to Do When You Get a Salary Increase
Celebrate, then plan.

Will you get what Social Security promises?

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The Social Security Administration will happily forecast your future monthly retirement check. Trouble is, it’s often off the mark. Understanding the sometimes-flawed assumptions underlying the estimate can help you make smarter decisions about when to claim your benefit.

First, of course, you should know how to access those estimates. You can find yours online by creating a “My Social Security” account at the Social Security Administration’s site, or you can call 800-772-1213 to request a paper version. (The agency automatically sends paper copies to people 60 and over if they haven’t yet started benefits or created an online account.)

Social Security projects how much you’ll receive if you start benefits at the earliest age, 62, as well as what you’ll get if you start instead at your full retirement age — currently 66 and rising to 67 for people born in 1960 or later — or at 70, when benefits max out.

In my latest for the Associated Press, find out how Social Security estimates your benefits.

Monday’s need-to-know money news

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Today’s top story: In ‘SIM Swap,’ criminals really have your number. Also in the news: Don’t let price be your only guide when choosing an airport, a new SmartMoney podcast, and why you shouldn’t sign up for an airline credit card when you’re on the plane.

In ‘SIM Swap,’ Criminals Really Have Your Number
How to reduce the chances of being victimized.

Choosing Among Airports? Don’t Let Price Be Your Only Guide
There are many factors to consider.

SmartMoney podcast: ‘How Much House Can I Afford?’
It’s about more than just the numbers.

Don’t Sign Up for an Airline Credit Card When You’re on the Plane
Resist the impulse.

Q&A: Death doesn’t take a financial holiday. Here’s a cautionary tale

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Dear Liz: My daughter has two children, ages 2 and 4. Recently the children’s father took his own life. He was 27. The job he worked as long as I knew him paid him in cash, so he didn’t pay into Social Security. Does this mean the children cannot receive survivor benefits from Social Security?

Answer: If the father never worked at a job that paid into Social Security, your grandchildren — and your daughter — won’t qualify for the survivor benefits they could have received had he been paid legally rather than under the table.

Their one hope is if he had a previous job that did pay into Social Security.

At 27, he would have needed at least six quarters of coverage to trigger survivor benefits, says Bill Meyer, founder of Social Security Solutions, a claiming strategies site.

The older a person is, the more quarters are needed to qualify for benefits, but no one needs more than 40 quarters. The amount of earnings required for a quarter of coverage is $1,360 in 2019. Once you earn $5,440, you’ve earned your four quarters for the year.

If the father had earned those six quarters, his death would trigger survivor benefits for his children that typically last until age 18 (or until 19, if they are still in high school full time). Your daughter also would be entitled to benefits until the younger child turned 16, because she’s caring for the deceased person’s minor children.

It’s possible this young man was paid under the table because he was not able to work legally in the U.S. If that’s the case, he and his family wouldn’t qualify for Social Security benefits even if payroll taxes had been deducted. If he opted for cash because he or his employer didn’t want to pay taxes, though, that was a choice that had expensive repercussions for the people he left behind.

Q&A: Pension payout planning

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Dear Liz: My husband and I each receive a pension from the companies where we worked. If my husband dies first, will his company continue to pay me his pension and vice versa?

Answer: That depends on how you chose to receive your benefits. Typically people are offered a choice of payouts: a “single life” option that ends at the pensioner’s death, and “joint and survivor” options that continue payments after the pensioner dies. A 50% joint and survivor option would pay half the monthly amount after the pensioner’s death, while a 100% option would continue the payments without reduction.

The option that continues payments without reduction, however, often offers the smallest monthly payment to start. The “single life” option pays the largest monthly amount, but the fact that the payments end at the first death can leave the survivor in a bad way.

Q&A: Living trust viewing restrictions

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Dear Liz: How in the world do I find out the details of my parents’ trust? My father recently died and my mother, who is 89, is not familiar with the details. My older sister is not responsive when I ask questions. She and I are the only children. My husband recently became disabled and it would be a comfort to know if we had any money coming from my parents. Can you give me any advice?

Answer: Presumably you’re asking about a living trust, which is designed to avoid probate, the court process that otherwise follows death. Unlike wills, living trusts don’t have to be filed with the courts so you can’t go down to the county courthouse to look up the details.

Living trusts are revocable trusts, which means they can be changed. People other than the trust creators don’t typically have a right to see the trust until it becomes irrevocable.

In the past, part of a living trust often became irrevocable when one spouse died. Today, it’s more common for trusts to remain revocable until the surviving spouse dies.

To some extent, state law determines who gets to see a copy of the trust once it’s irrevocable. Typically beneficiaries have a right to see the trust, and in some states (including California) so do “heirs at law” — people who aren’t beneficiaries but who would have inherited under state law if there had been no trust or will.