Get smart with your money
Today’s top story: Timing is everything when it comes to Social Security benefits. Also in the news: How Wi-Fi calling can save you money, a quiz to test your money smarts, and four concepts that’ll help you master your money.
For Social Security Benefits, Timing Is Key
Picking the right time.
What Wi-Fi Calling Is and How It Can Save You Money
Saving your minutes.
Do you have money smarts?
Take the quiz.
Focus on These Four Concepts to Finally Master Your Money
What to concentrate on.
Dear Liz: How far back can Social Security go for someone who did not know to apply for spousal benefits? I’m 69, still working and did not know I was eligible for spousal benefits from my retired wife when I turned 66. Social Security is indicating six months of retroactive benefits is the maximum.
Answer: Unfortunately, that’s correct. You’ve missed out on at least two and a half years’ worth of spousal benefits based on your wife’s work record.
You still can file a restricted application for spousal benefits only and get a lump sum payment for the previous six months. You also still have the option to switch to your own benefits when they max out at age 70. These strategies aren’t available to younger people because Congress changed the rules last year.
Social Security rules can be complex, and the penalty for misunderstanding or missing deadlines can be huge. “Get What’s Yours,” a book about Social Security-claiming strategies that recently was updated, should be required reading for anyone approaching retirement age.
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How your credit card use factors into scores.
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Social Security survival strategies with COLA only at 0.2%
Surving a stagnant cost of living increase adjustment.
How Apps Can Help (and Hurt) Your Finances
Could your apps lead you to spend more?
Dear Liz: I’m a female who has been with her male partner for 20 years. We are not married. In the event one of us dies, is the other entitled to the partner’s Social Security benefits? Or do we have to be legally married to qualify for benefits?
Answer: Your genders don’t matter. Your marital status does. To get Social Security benefits based on the other person’s work record, you need to make it legal.
Marriage offers hundreds of legal, financial and estate-planning advantages, and Social Security is certainly one of those. With married couples, lower-earning partners may qualify for bigger benefit spousal benefits than the retirement benefits they would receive on their own work records. After a death, the surviving spouse gets the larger of the couple’s two benefits. Social Security makes up more than half of most elderly people’s income, so this is no small deal.
Dear Liz: Recently someone wrote to you about plans to receive a state pension and apply for Social Security benefits. You said if the person’s job didn’t pay into Social Security, the Social Security benefit might be reduced because of the state pension. I have a state pension from a job that did not pay into Social Security and was under the impression that I would not be eligible for Social Security benefits. Am I wrong about that?
Answer: If you previously worked at a job that paid into Social Security, you may be able to receive both your state pension and a Social Security retirement benefit. Your Social Security benefit is typically reduced, but never eliminated, because of pensions received from jobs that didn’t pay into the system.
This reduction, known as the windfall elimination provision, does not apply to people who worked for 30 years or more in jobs that paid into Social Security. Its effect is greatest on people who worked less than 20 years in such jobs. Between 20 years and 30 years, the impact declines year by year.
Your state pension also affects — and can eliminate — any spousal or survivor benefits you might have received based on a current or former spouse’s Social Security work record. This separate provision is known as the government pension offset. You can learn about both the windfall elimination provision and government pension offset on the Social Security site, www.ssa.gov.
Dear Liz: My full retirement age for Social Security benefits is 66. To receive that amount, do I have to keep working until I am 66? I was going to retire at 63 and receive a state pension and wait until 66 to apply for Social Security. I wasn’t planning on working full-time from 63 to 66.
Answer: You don’t have to keep working. When to retire can be a separate decision from when to start Social Security benefits.
Before you do either, though, find out how your state pension may affect your Social Security benefits. If you’re receiving a pension from a job that didn’t pay into the Social Security system, your Social Security benefit may be reduced. If that’s the case, it can make sense to delay taking your pension and start taking Social Security earlier. You can use claiming software such as MaximizeMySocialSecurity.com or SocialSecurityChoices.com to see what might be the best approach.