Social Security for Divorced Widow(er)s
The other day, I took a field trip to our local Social Security Office with one of my clients. Remember how exciting field trips in school were? Well, this wasn’t like that. Going to the Social Security Office is like electively having a group root canal procedure with 50 grumpy individuals and the hygienists received their training from the DMV… you’ll wait forever; everyone is there out of obligation (and grumpy about it); they use a lot of jargon, and then get snippy when you ask clarifying questions; the procedure itself is necessary, yet painful; and, you leave – hoping to never go through it again.
That’s why we go with our clients! Because, (1) misery loves company, and (2) what they have to share is incredibly valuable to most individuals who will rely heavily on Social Security as part of their retirement income.
Contrary to my facetious diatribe on the pain of visiting the Social Security Office, we did receive guidance from a particularly knowledgeable and helpful counselor. Here was our scenario: My client was married to her former husband for several decades; she is not currently married now; she is employed and earning good wages; all the women in her family generally live to be 90+ years old (so she has longevity); and, she needs to get the most she can out of social security.
Most people are aware they can qualify for half of their former spouse’s Social Security if you were married for 10 years and are not currently remarried. You just have to run the numbers to see what’s best for you. For this client, her social security benefit would be larger than half of his, so it would not make sense for her to do that.
You may also be aware that you can delay taking your benefit until age 70. By delaying, you get an 8% increase for each year you delay past your Full Retirement Age. That’s appealing to this client, but she’d prefer to have the income sooner.
Here is where the situation is unique… My client’s former spouse is having some major health complications. Unfortunately, he could pass away as a result of his complications. If he does, she has an interesting strategy to explore.
Widows or Widowers can claim their deceased former spouse’s social security and allow their own benefit to be delayed until age 70 (this assumes they were married for 10 or more years and are not currently married). So, they get the benefit of earlier income while also growing their own benefit by 8% each year past Full Retirement Age.
This is not a “One-Size-Fits-All” strategy. Each client is different; for this client in particular, she will likely live to 90, enjoys her work, is in good health, and can afford to delay the larger benefit to age 70. So, it would make sense for her to implement a strategy where she can collect on her deceased former spouse’s social security while allowing her benefits to grow until age 70.
If you’re considering what makes sense for you, give us a call and we’ll help you crunch the numbers.