Explaining Spousal Social Security Benefits

Spousal Social Security benefits can be hard to decipher, so I was glad that Elaine Floyd, the director of retirement and life planning at Horsemouth, sat down with USA Today reporter Robert Powell to explain some of the innuendos.  “What we seem to be dealing with most these days are people who want spousal benefits and don’t understand the conditions under which they can receive them,” she said.  Here are some tips:

  • The higher earner must file first—this hasn’t always been the case. You can’t claim a spousal benefit until your spouse has claimed their own benefit.  Before the Bipartisan Budget Act of 2015 became law, a dependent or the lower earning spouse could claim a benefit right away and take advantage of something called the file-and suspend strategy.  That loophole is gone.  You’re not eligible for a benefit until you are age 62 or have a qualifying child under your care.
  • You can’t receive a spousal benefit unless your own benefit is less than 50% of your spouse’s benefits. There is an exception for those born before January 2, 1965.  Those individuals can claim a spousal benefit and then claim their benefit as late as age 70.
  • The spousal benefit can be as much as half of the higher earner’s “primary insurance amount,” or PIA. If a spouse files for a spousal benefit before reaching full retirement age or FRA, he or she, unless caring for a qualifying child, will receive a reduced benefit.
  • Spousal benefits are only paid until the death of the first member of the couple.

 

https://www.usatoday.com/story/money/personalfinance/retirement/2021/08/01/retirement-5-things-to-know-about-social-security-spousal-benefits/5430601001/

TRUST Act Working Its Way Through Congress Could Cut Medicare And Social Security

A very unpopular bill called The Time to Rescue United States Trusts (TRUST) Act is now working its way through Congress.  If passed, it would set up groups of a dozen lawmakers with the power to recommend cuts to Social Security and Medicare.  This would hit the most vulnerable.  Half of those covered by Medicare have incomes of less than $27K.  Social Security is the main source of income for more than 34 million older households.  Under the new law, if seven of the twelve committee members approve of changes, they would be fast tracked in both the House of Representatives and the Senate, with no adequate debate among lawmakers and no amendments permitted on the floor of the House or the Senate.  To make sure that your senators and representative know you oppose the TRUST Act, please go to  https://action.aarp.org/trustact.

Monterey, CA Zoom Calls Can Stave Off Alzheimer’s Disease And Dementia, New Study Finds ” By Derek Baine

An old couple sitting together and watching laptop

A recent study by the University of West London’s Geller Institute of Ageing and Memory found that video conferencing services like Zoom has helped older people stave off the effects of Alzheimer’s disease and Dementia.  The study was massive, analyzing data from 11,418 men and women over the age of 50 who were asked how often they interacted with friends and family online, on the phone and in person.  They then completed memory tests which involved recalling keywords at various intervals.  Researchers found that regular communication helps seniors maintain long-term memory and those that use online tools have shown less decline in memory than those who don’t.  “This shows for the first time the impact of diverse, frequent and meaningful interaction on long-term memory, and specifically, how supplementing more traditional methods with online social activity may achieve that among older adults,” said Snorri Rafnsson, the study’s lead author.  Regular readers of my blog know that both my father and grandmother had this terrible disease when they passed away.  There are wonderful people at our local chapter of Alzheimer’s Association in Ryan’s Ranch.  They also have a 24-hour hotline if you need support at 800-272-3900.  They have also been doing more and more support groups online since the pandemic started, something I believe will continue into the future.

https://www.cnn.com/2021/05/15/health/elderly-zoom-dementia-pandemic-scli-scn-intl/index.html?utm_term=1621168651160e67555ee3ae3&utm_source=cnn_Five+Things+for+Sunday%2C+May+16%2C+2021&utm_medium=email&bt_ee=PyKeGR6jgg4O%2FIwFnTbgeQRv%2FPTqOwbLuOHcHkbLYEvioBrrxjpBWGqGzMGsjw9v&bt_ts=1621168651163

Social Security CPI Forecasted To Be Up 6.1%

There is good news and bad news in a new report coming out from The Senior Citizens League, a non-partisan senior group, which raised their forecast for the Social Security from 5.3% to 6.1%.  That’s a huge increase from prior years.  However, it’s based on a basket of goods cost of living (COLA) increase, which means that the increase will likely just make up for a 6.1% hike in goods and services that you buy every day.  In addition, some things like real estate and rental prices, medical costs and long-term care are skyrocketing.

 

https://www.forbes.com/sites/davidrae/2021/07/14/how-big-will-the-social-security-cost-of-living-adjustment-be-for-2022/?utm_source=newsletter&utm_medium=email&utm_campaign=personalized&cdlcid=607e1442fe2c195e916f3bb4&sh=433b142b52fa

President Biden Fires Head Of Social Security Administration

In a rare move, a senior government official, Andrew Saul—the Commissioner of the Social Security Administration, was asked to resign by the President of the United States and refused.  As a result, President Biden, after receiving advice from White House Counsel that he could legally remove him, fired him.  Saul had a contract to serve a six-year term expiring in January of 2025 which only allowed for his termination for “neglect of duty” or malfeasance in office.”  However, the Supreme Court recently ruled requiring cause for removal of a federal employee was unconstitutional.  Perhaps preparing for a legal battle with Saul, The White House issued a scathing press release which said, “Since taking office, Commissioner Saul has undermined and politicized Social Security disability benefits, terminated the agency’s telework policy that was utilized by up to 25% of the agency’s workforce, not repaired SSA’s relationships with relevant federal employee unions including in the context of COVID-19 workplace safety planning, reduced due process protections for benefits appeals hearings, and taken other actions that run contrary to the mission of the agency and the president’s policy agenda.”  President Biden also called for the resignation of the agency’s deputy commissioner David Black, who submitted his resignation.  Kilolo Kijakazi, the Social Security Administration’s deputy commissioner for retirement and disability policy, will serve as acting commissioner.

 

https://federalnewsnetwork.com/people/2021/07/biden-fires-saul-as-ssa-commissioner/

Salinas, CA Guide To Social Security Survivor’s Benefits

 

After the death of a loved one, it can be difficult to deal with bills, insurance, and Social Security.  Of the 5.7 million people awarded Social Security benefits in 2019, 886K were survivors of deceased workers.  In total there were 3.9 million widows and widowers receiving benefits in 2019.  You should report to the Monterey County Social Security office when a spouse dies.  Their number is 1-800-772-1213.  Unfortunately, you cannot report a death or apply for survivors benefits online.  The calculation is that if your deceased spouse was taking Social Security, your benefit will be the greater of your benefit or your spouse’s benefit.  If you are not yet collecting Social Security and you’re at least 60, the best way to maximize your benefits are to collect the survivors benefit at your current age and then switch to retirement benefits starting at age 70.

https://www.usatoday.com/story/money/personalfinance/retirement/2021/01/20/social-security-covid-understanding-how-survivors-benefits-work/4221795001/

A Spouse’s Death Can Take Its Toll On Your Investment Portfolio

The Wall Street Journal recently posted a story about the fact that your financial portfolio might quickly start unraveling if you don’t prepare for the financial consequences of your spouse’s death in advance.  Not only will you see two Social Security checks go down to one, some people have pensions that don’t have survivorship benefits and those would expire immediately.  In addition, since you will have to file single, your tax rate may go up.  “When that plan is disrupted by the tragic death of a spouse, there isn’t a lot you can do besides cut expenses or go back to work,” Jennifer Murray, a financial advisor, told The Wall Street Journal.  The bottom line: discuss this issue with your financial planner.

Mistakes People Make When Taking Social Security : By Derek Baine

The Wall Street Journal recently ran a story entitled, The Biggest Mistakes People Make With Social Security, and in the number one position was thinking they will die young and opting to take early Social Security.  For the typical American between the ages of 55 and 64, the present value of their lifetime stream of Social Security payments amounts to about 60% of their retirement assets, according to Boston College’s Center for Retirement.  And it’s true for the wealthy, not just middle and low-income retirees.  “If you have a high-earner couple who earned the max and don’t claim until 70, you’re talking about getting the better part of $100K per year,” says Alicia Munnell, the center’s director.  “You have to be very wealthy before you don’t consider that important.”  If you claim Social Security at the age of 70 rather at the age of 62, your benefit will be at least 76% higher.  That’s a lot of money over what could be decades of retirement!

https://www.wsj.com/articles/the-biggest-mistakes-people-make-with-social-security-11620561601

Social Security Tips To Avoid Income Tax Surprises

Many seniors are surprised to find out that their Social Security benefits are taxable, and the bill can be significant.  The amount that is taxable for an individual earning $25K to $34K is 50%, while if you make more than $34K then 85% of your benefits are probably taxable.  What to do when you don’t want a surprise come April 15 is to fill out Form W-4V with The Social Security Administration requesting an amount to be withheld for taxes.  The choices are 7%, 10%, 12% and 22%.  These percentages apply to the full income, not the 50% or 85% that is taxable.    Most states, including California, do not tax Social Security income.

https://www.usatoday.com/story/money/columnist/powell/2021/03/17/2021-tax-season-are-social-security-benefits-considered-taxable-income/4717044001/

 

Pacific Grove, CA Guide To Social Security Survivor’s Benefits

An old woman smiling and speaking on the telephone

After the death of a loved one, it can be difficult to deal with bills, insurance, and Social Security.  Of the

5.7 million people awarded Social Security benefits in 2019, 886K were survivors of deceased workers.  In total there were 3.9 million widows and widowers receiving benefits in 2019.  You should report to the Monterey County Social Security office when a spouse dies.  Their number is 1-800-772-1213.  Unfortunately, you cannot report a death or apply for survivors benefits online.  The calculation is that if your deceased spouse was taking Social Security, your benefit will be the greater of your benefit or your spouse’s benefit.  If you are not yet collecting Social Security and you’re at least 60, the best way to maximize your benefits are to collect the survivors benefit at your current age and then switch to retirement benefits starting at age 70.

https://www.usatoday.com/story/money/personalfinance/retirement/2021/01/20/social-security-covid-understanding-how-survivors-benefits-work/4221795001/