Get smart with your money
To Understand Your Credit Card’s Free FICO Score, Get Your Credit Report
How your credit card use factors into scores.
What’s the Difference Between a Soft Inquiry and a Hard Inquiry on My Credit Report?
Which ones affect your credit score?
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.
Everything you think you know about Social Security is probably wrong.
The system isn’t “running out of money.” It’s not going bankrupt. And the chances are quite good that millennials will receive benefits from Social Security — although half of them don’t believe it, according to a 2014 Pew Research Center study.
Not understanding how Social Security works can be hugely detrimental to your future retirement. In my latest for NerdWallet, why it’s important to act instead of panicking.
Dear Liz: After death, do ex-spousal Social Security benefits continue?
Answer: Any checks you’re getting from Social Security are supposed to stop when you die. But you’re probably asking what happens after the death of your ex-spouse.
The good news is that you would be eligible for divorced survivor benefits. Instead of receiving a check based on half of what your ex was getting, your payment will be based on the entire check your ex was getting. (With either benefit, the check would be reduced if you started benefits before your own full retirement age.)
Benefits for divorced spouses are available if the marriage lasted at least 10 years. Divorced spousal benefits end if the person remarries, but divorced survivor benefits can continue if the survivor remarries after reaching age 60.