Get smart with your money
By Liz Weston
Dear Liz: When the Social Security Administration makes its cost of living adjustments, do these increases get factored into the benefit amounts for people who are not yet collecting their Social Security?
Answer: Social Security’s inflation adjustments are factored into your retirement benefits starting at age 62, whether or not you’re actually collecting checks. So there’s no reason to speed up an application just to lock in a cost of living adjustment.
By Liz Weston
Dear Liz: In a recent column, an attorney suggested that a veteran’s information can be shredded three years after death. However, surviving spouses of veterans can be eligible for benefits to cover the costs of assisted living and would need to provide that information.
Answer: That’s an excellent point. Many people aren’t aware of the “aid and attendance” benefit that can help veterans and their spouses pay for help with activities of daily living, including bathing, dressing and using the bathroom. These custodial care costs are typically not covered by Medicare.
By Liz Weston
Dear Liz: I am a teacher getting ready to retire. I have been collecting a spousal benefit from my husband’s Social Security. My understanding is that once I start collecting my pension, I will be subject to the windfall elimination provision. Is there a way to continue to collect against my husband’s Social Security, which is greater than my own Social Security benefit?
Answer: Because you will be receiving a pension from a job that didn’t pay into Social Security, you’re subject to two provisions: the windfall elimination provision, which can reduce but not eliminate your own Social Security benefit, and the government pension offset, which can reduce or eliminate any spousal or survivor benefit.
If the GPO wipes out your spousal benefit, you may still get at least a portion of your own benefit. Claiming strategy sites such as Maximize My Social Security and Social Security Solutions could help you estimate the effect of those provisions.
By Liz Weston
Dear Liz: After a spouse’s death, I am wondering if there is some guidance on how long to keep items such as a driver’s license, Social Security card, Medicare and health plan card, passport, veteran’s information and so on. I haven’t seen this addressed in your column.
Answer: Guidance about what to keep and discard after a death can vary widely, so you may want to ask your estate attorney for help. In general, though, you can begin to dispose of many documents three years after the estate is settled, said Jennifer Sawday, an estate planning attorney in Long Beach.
In some cases, you can shred them sooner. Social Security numbers are often printed on the death certificate, so the card can be shredded once you verify the number on the certificate is accurate, Sawday said. You also may wish to shred the passport as soon as possible to avoid it falling into the hands of an identity thief. Another option is to mark the passport “void” and keep it as a family history item, she says.
The driver’s license is another possible family history item — and boon to an identity thief — but it can be discarded at the three-year point, Sawday said. Veteran’s information can be kept for family history purposes or discarded three years after any death VA benefits are claimed.
Medicare and health plan cards should be kept in case any medical billing issues arise and then discarded when those issues, if any, are resolved, she said.
By Liz Weston
Dear Liz: I’m 70, collecting Social Security since age 62 and still working. My ex-wife passed away a few years ago at 67. We were married for 25 years. I read that I could collect on her Social Security benefits as the survivor, but Social Security said no. What did I not understand about this?
Answer: Many people misunderstand how survivor benefits work. You don’t get the deceased person’s check in addition to your current benefit. If the survivor benefit is larger than what you currently receive, you get that payment instead. When Social Security said no, the agency was confirming that your benefit is larger than what you could receive based on your ex-wife’s earnings history.
Understanding how survivor benefits work is hugely important for currently married couples as well. Many are not prepared for the sharp drop in income that happens when the first spouse dies and the survivor is left with only a single check. Having the higher earner delay Social Security as long as possible can help ensure the survivor has more to live on.
By Liz Weston
Dear Liz: My recently divorced girlfriend receives Social Security based on her ex-husband, who is still living. If we were to get married, would either of us lose part or all of our Social Security benefits? It seems like a simple, straightforward question, but every Social Security representative I speak with by phone or in person gives me a different answer. My girlfriend did not work long enough to earn her own Social Security benefits. She was married over 30 years and is over 60.
Answer: The answer to this question isn’t complicated, so it’s unclear why you got different answers. If the ex-spouse is still alive, then your girlfriend’s benefit is a divorced spousal benefit that ends if she remarries.
If the ex-spouse were not alive, then your girlfriend would be receiving a type of survivor benefit known as a divorced survivor benefit. People receiving survivor benefits can keep them after marriage if they are 60 or older at the time of the marriage.