Ask Liz Weston

Get smart with your money

Q&A

Q&A: To qualify for Social Security survivor benefits

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Dear Liz: I am 85 and have been living (unmarried) with a man since about 1977. We have always filed our tax returns separately and now we both collect Social Security. I have been told that when one of us passes, the other cannot collect the deceased one’s benefits. We have been thinking about getting married and would like to know if there is a time regulation involved.

Answer: You generally must be married for at least nine months to qualify for Social Security survivor benefits. Keep in mind that the survivor will collect only the larger of a couple’s two checks; the smaller benefit goes away.

So marriage could benefit the lower earner financially, and give the higher earner peace of mind, knowing that their lower-earning partner will have access to the larger benefit. Marriage has a number of other financial and legal benefits, including the ability to make decisions for your spouse should they become incapacitated.

Marriage would end your ability to collect a divorced spousal benefit from a previous spouse, however. If either of you have been married before and the marriage lasted at least 10 years, investigate whether you might qualify for a larger benefit based on that partner’s work record. If the previous spouse has passed, you may qualify for a divorced survivor benefit. Unlike divorced spousal benefits, divorced survivor benefits don’t end at remarriage as long as you’re 60 or older when you remarry.

Q&A: Great credit, but rejected for a credit card. What gives?

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Dear Liz: I recently applied online for a credit card and was rejected, as my credit reports were frozen. I thawed them and applied again, only to be declined again. I received a letter stating that the rejection was because I have no installment credit history. I have no debt, credit scores in the mid-800s and $2 million in retirement accounts. Our paid-for home is valued at approximately $1million. This makes zero sense.

Answer: Federal law requires credit card issuers to send the “adverse action” letter you received to explain why your application was denied. But that letter doesn’t have to be the last word.

You can call the issuer and politely ask that your application be reconsidered. Most credit applications are evaluated by algorithms, rather than people. Getting a human involved can make all the difference, so you’ll want to get this person on your side. Be friendly and polite.

Mention all of the factors in your favor, such as a steady income and a (presumably) long history of handling credit cards responsibly. Explain that you don’t have an installment loan, such as a mortgage, because your home is paid off. If you have an existing relationship with the issuer, such as other credit cards or bank accounts, mention that as well.

There are no guarantees you’ll be successful if you ask, but you’re guaranteed not to get the card if you don’t ask. Good luck!

Q&A: The ins and outs of what counts for probate

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Dear Liz: The value of our car, furniture and personal items is well below the $185,000 that currently triggers probate in California. We no longer own real estate. Am I correct that investment and bank accounts that have designated beneficiaries do not count toward the probate limit?

Answer: Yes. (Your car doesn’t count either, by the way.)

Most states have simplified procedures for smaller estates. California’s limit, which is raised with inflation every three years, was set at $184,500 on April 1, 2022. What’s counted for probate purposes depends on state law, and California excludes cars, boats and mobile homes, as well as bank accounts owned by multiple people, property that transfers directly to a spouse and real estate outside California.

Other property that avoids probate includes life insurance proceeds, death benefits and accounts that have named beneficiaries. Real estate can avoid probate if it’s held in joint tenancy or is transferred using a transfer-on-death deed. Property in a living trust also avoids probate.

Q&A: When should a second earner start taking social security?

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Dear Liz: I am 64 and still working and earning decent pay. My wife is 61 and retired. I have been a high earner for most of my life while she was working and raising our family. I don’t plan to retire anytime soon. Is it a good idea for her to start taking Social Security at 62?

Answer: The vast majority of people are better off delaying their Social Security applications for as long as possible so they can maximize their lifetime benefits. It’s especially important for you to delay, since as the higher earner, your benefit will determine what the survivor gets.

Your wife, however, may be one of the few who is better off starting early. That may be the case if you continue to delay your application, and her eventual spousal benefit is more than what she would receive on her own record.

If both of those things are true, she could start her own reduced retirement benefit at 62, then switch to a spousal benefit of up to half of your check after you apply for your benefits — preferably at age 70, when they max out.

Your wife won’t be able to get a spousal benefit until you apply for your own. On the other hand, she won’t be allowed to switch benefits if you’re already receiving yours when she applies.

Clearly, there are a lot of rules involved, and the best course for you two will depend on the specifics of your situation. You’d be smart to use a Social Security claiming site, such as Maximize My Social Security or Social Security Solutions, to help you determine your best approach.

Q&A: Can an adult child inherit a deceased parent’s Social Security payments and pension?

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Dear Liz: My mom passed away recently. She had a teacher’s pension as well as Social Security benefits. Am I eligible to receive part of her benefits? If so, what steps must I take?

Answer: Social Security survivor benefits are meant to help a deceased worker’s dependents. Dependents include spouses, minor children and disabled children, as long as the disability started before the child turned 22. If you qualify, contact Social Security at (800) 772-1213.

Similarly, pension survivor benefits are typically limited to spouses and dependent children. You may be eligible for a one-time death benefit, if your mother named you as her beneficiary. Contact the pension administrator for details.

Q&A: Should this reluctant retiree pay an advisor?

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Dear Liz: I’m about to retire. A friend’s money manager has done well by her, doubling her portfolio in five years. This manager would charge a 1.5% fee to take control of my money, invest it, and generate income to supplement my Social Security. My heart is truly uncomfortable turning over control of my life savings to professional management, even though my head tells me it makes sense. Would a fair compromise between my heart and head be to pay a financial advisor to tell me what to do, but allow me to retain control of my hard earned savings?

Answer: Yes. You may have to search a little harder to find such an advisor, but you could be better off.

First, don’t be too impressed by a manager who doubled a portfolio in the last five years. An investment in a plain vanilla S&P 500 index fund would have performed about as well, at a much lower cost.

Speaking of cost, a 1.5% fee is relatively high for asset management. A 1% fee is much more common. If instead of a money manager you hired a fiduciary, fee-only financial planner — one committed to putting your best interests first — you typically would get comprehensive financial planning advice as well as investment management for that 1%. Such planning could include a tax-smart, sustainable plan for tapping your retirement funds, advice on Social Security claiming strategies, help picking the right Medicare coverage and a review of your estate plan, among other services.

If you’d rather not have someone else manage your portfolio, though, you have other options. The Alliance for Comprehensive Planning (www.acplanners.org) and the XY Planning Network (/www.xyplanningnetwork.com) represent fiduciary, fee-only planners who charge retainer fees. You can find fiduciary, fee-only financial planners who charge by the hour at Garrett Planning Network (www.garrettplanningnetwork.com).