• Skip to main content
  • Skip to primary sidebar

Ask Liz Weston

Get smart with your money

  • About
  • Liz’s Books
  • Speaking
  • Disclosure
  • Contact

Liz Weston

Q&A: Social Security rules differ for divorced spouses and divorced survivors. We explain

December 19, 2022 By Liz Weston

Dear Liz: My spouse’s parents were married for 11 years. They divorced at age 32 and my mother-in-law remarried at 42. My mother-in-law and her ex are now 82. Her husband is 93 and in poor health. When her husband dies, she does not get his pension. Her current Social Security benefit is $850 a month. Her husband receives $1,200 while my father-in-law’s benefit is $2,500 a month. She is convinced that when her current husband dies, she will be eligible for her ex-husband’s $2,500 benefit. I think that only happens when her ex dies, but she can get 50% while he is still alive. What is correct?

Answer: You’ve got it right.

People may be eligible for benefits from ex-spouses’ work records if the marriage lasted at least 10 years.

While the ex is alive, your mother-in-law could qualify for divorced spousal benefits of up to 50% of his benefit at full retirement age — but only if she is currently unmarried. If her ex dies, she might be eligible for divorced survivor benefits of up to 100% of the benefit he was receiving — but only if she is widowed or divorced. (People can receive divorced survivor benefits while married, but only if they married at 60 or later.)

She would receive benefits based on her ex’s work record only if the check is larger than her own.

The different rules for divorced spousal versus divorced survivor benefits can be complicated, so it’s not surprising that she’s confused. Let’s use the numbers you provided to make this somewhat clearer.

If she is widowed and her ex is still alive, she would get a divorced survivor benefit of $1,250, because it’s (slightly) larger than the $1,200 survivor benefit from her husband’s record. (Her own $850 benefit would essentially go away, so her household income would drop pretty dramatically from $2,050 plus the pension to $1,250.)

If her ex should subsequently die, she would be eligible for divorced survivor benefits of $2,500 (or whatever the ex was receiving at the time of his death).

There are some caveats here.

Divorced spousal benefits are based on the ex’s “primary insurance amount,” or what he would receive at his full retirement age. For someone born in 1940, that was 65 years and six months. Your mother-in-law would not be eligible for any delayed retirement credits her ex may have earned by putting off his application until after his full retirement age.

On the other hand, she wouldn’t be penalized if he started his benefit before full retirement age. The bottom line is that her divorced spousal benefit could be somewhat more or less than 50% of what he is currently receiving, depending on when he applied.

Survivor and divorced survivor benefits, on the other hand, are based on what someone was actually getting when they died. An early start can stunt those benefits whereas a later start can increase them.

That’s true of regular survivor benefits as well, and why it is so important for the higher earner in a married couple to delay filing as long as possible. The larger benefit can really help when the first spouse dies and one of the couple’s two checks ends.

Your mother-in-law’s financial prospects were made even worse by the decision to get a “single life” payout from the pension rather than a “joint and survivor” option. The joint and survivor option would have meant accepting a smaller benefit, but it would have lasted for your mother-in-law’s lifetime rather than ending at her husband’s death.

A married worker can’t choose the single life option without spousal consent, and spouses would be smart to consult a fee-only financial planner before they agree to give up a lifetime stream of income.

Filed Under: Divorce & Money, Q&A, Social Security

Q&A: Authorized credit card users

December 19, 2022 By Liz Weston

Dear Liz: Following your advice on building credit, we recently added our son as an authorized user on one of my credit cards. My question is, what happens when I pass away? Does the card remain with him as the only user? Do I need to address this in my will?

Answer: Your executor, the person you named in your will to handle your estate, will be responsible for closing the account when you die. If there are any balances owing, the debt will be paid from your estate. There’s no need to make special provisions for the account in your will. By that time, your son, one would hope, would have cards of his own, so the closure shouldn’t affect his credit scores much if at all.

Filed Under: Credit Cards, Q&A

Sharing a roof, and money, with adult kids

December 12, 2022 By Liz Weston

When Amanda Claypool was 28, she left a government contracting job in Washington, D.C., and moved back to her parents’ house in upstate New York while she figured out her next step. Then the pandemic struck, and her temporary return lasted longer than she’d planned.

Living with her parents for several months “helped give me more flexibility to pivot to a new career,” says Claypool, who is now a content creator in Asheville, North Carolina. Her parents covered her expenses related to food and housing. In return, she helped them declutter and sell about $10,000 worth of vintage toys and collectibles online.

Claypool’s decision to return home is increasingly common. The Pew Research Center found that one quarter of U.S. adults ages 25 to 34 lived with parents or other relatives in 2021 and that the portion of young adults who do so has steadily climbed over the past 50 years.

Stefanie O’Connell Rodriguez, host of Real Simple’s “Money Confidential” podcast, has noted the trend. “Even prior to this latest round of inflation, we saw a greater share of millennials moving back in with parents and staying at home longer. The pandemic accelerated that,” she says.

While moving back home can provide a financial safety net for young adults, it can also negatively affect their parents’ finances and stymie their own growth toward becoming financially independent. In Kimberly Palmer’s latest for the Associated Press, learn how to navigate intergenerational living so it benefits everyone involved.

Filed Under: Liz's Blog Tagged With: intergenerational living, sharing a roof

This week’s money news

December 12, 2022 By Liz Weston

This week’s top story: Smart Money podcast on rising interest rates, and budgeting with apps. In other news: How the Airbnb ‘gold rush’ could impact the homebuying market, avoiding 5 banking mistakes to earn more interest, pay less in fees, and co-buying a house.

Smart Money Podcast: Rising Interest Rates, and Budgeting With Apps
This week’s episode starts with a discussion about who is hurt the most by the Federal Reserve’s rate hikes.

How the Airbnb ‘Gold Rush’ Could Impact the Homebuying Market
A swoon in short-term rentals could result in a glut of properties in some areas, but make room for home buyers in others.

Avoid 5 Banking Mistakes to Earn More Interest, Pay Less in Fees
You might not know you’re making these common banking mistakes. Find out what they are and how to easily avoid them.

Co-Buying a House: How Platonic Partners Make It Work
Platonic partners are affording homes by combining their purchasing power. Here’s what to know if you’re considering this route.

Filed Under: Liz's Blog Tagged With: Airbnb, banking mistakes, co-buying a house, homebuying

Q&A: When to take survivor benefits

December 12, 2022 By Liz Weston

Dear Liz: My wife started collecting Social Security at her full retirement age six years ago. I’m waiting to file to get my maximum Social Security payout at 70 in 2025. If I were to file today, my current benefit would be significantly higher than hers, and even more so if I wait. If I predecease her without filing before reaching my maximum benefit at 70, what are her options for survivor benefits? Would her new benefit amount be based on my date of death or my full retirement age, or can she delay filing until I would have turned 70 in 2025?

Answer: Your wife would receive a survivor benefit equal to whatever you had earned as of your date of death, including any delayed retirement credits. She wouldn’t increase her survivor benefit by delaying until 2025, if you die before then. On the other hand, she also wouldn’t face a reduction in the benefit for starting early, since she has already reached her own full retirement age.

You’re making the smart move by delaying because you’re maximizing both your own benefit and the sole Social Security check that one of you will receive after the other dies. But you don’t have to be married to benefit from delaying. New research by economists at Boston University and the Federal Reserve has found that virtually all American workers ages 45 to 62 should wait beyond age 65 to start Social Security and more than 90% should wait until age 70.

Filed Under: Q&A, Social Security

Q&A: How to buy U.S. Treasuries

December 12, 2022 By Liz Weston

Dear Liz: Can I purchase a U.S. Treasury bill myself or do I need to go through a bank or a financial advisor?

Answer: You can buy government-issued securities — including Treasury bills, bonds and notes —from TreasuryDirect, which is operated by the U.S. Department of the Treasury. Setting up an account usually takes just a few minutes, but you’ll need a valid Social Security number, a U.S. address and a checking or savings account to complete the process.

You also can buy Treasuries in a brokerage account. You can purchase a Treasury bill on what’s known as the secondary market, where securities are bought and sold, or you can invest in a Treasury money market mutual fund or a Treasury exchange-traded fund.

Filed Under: Financial Advisors, Investing, Q&A

  • « Go to Previous Page
  • Page 1
  • Interim pages omitted …
  • Page 92
  • Page 93
  • Page 94
  • Page 95
  • Page 96
  • Interim pages omitted …
  • Page 786
  • Go to Next Page »

Primary Sidebar

Search

Copyright © 2025 · Ask Liz Weston 2.0 On Genesis Framework · WordPress · Log in