Here are four underutilized elements of Social Security:
1. Divorced and not remarried? You can file for ex-spouse’s social security.
When you get divorced, it’s often assumed the financial relationship between ex-spouses is over, but that isn’t the case in the eyes of Social Security. If a divorcee is over the age of 62 and hasn’t remarried, they can claim social security benefits in their ex-spouse’s name. This isn’t some underhanded loophole either. If your ex-spouse is remarried, his or her current spouse can also apply for benefits on the account. There are a few rules though, including the fact that all parties must be of retirement age, which is usually between 65-67. The best part about this method of filing is if you file for your ex-spouse’s Social Security, your own Social Security can accrue and grow until you fully claim it at 70 years of age.
2. File and suspend.
This strategy is an excellent and simple way to make the most of your Social Security. This strategy works similarly to filing for your ex-spouse’s social security, but with the file and suspend option, you are still married. Here’s how it works: Spouse #1 files for Social Security and then immediately suspends their claim. Then, Spouse #2 makes a spousal claim for 50 percent of Spouse #1’s benefit. The beauty of this strategy is that Spouse #2 gets some retirement benefits, while Spouse #1’s benefits continue to accrue at a 7 percent rate until they are 70 years of age, at which time they will fully claim the benefit. If you and your spouse are healthy and can afford to wait for a delayed benefit, this is a great option.
3. Claiming spouse’s social security.
If one spouse has not worked enough to be eligible for Social Security, there is a workaround to help provide some benefits. If both spouses are over the age of 62, the non-qualifying spouse can file a claim to receive 50 percent of his/her spouse’s social security. This means that, between two spouses, you can essentially claim “one and half” Social Security benefits.
4. Survivor benefits.
This is a very underutilized benefit but one that can mean a world of difference in someone’s life. Life insurance is intended to ease the transition after someone passes, but Social Security can also be there. If, at the time of passing, the deceased has minor children or adult children who are disabled, they can receive the Social Security benefits. No one wants to think about something bad happening to a loved one, but there are ways to ease the pain, and applying for Social Security to lessen financial strain is one of those ways.
You pay into Social Security throughout your working life and you want to make the most of your payable benefits, but these four details are just the tip of the iceberg. Social Security is a complex system. If you want the most from it, you’ll have to do your research. But unlike in school, studying Social Security doesn’t lead to a test—it just leads to more benefits.
Peter Dunn, aka Pete the Planner, is an award-winning financial mind who has authored five books, hosts the popular Pete the Planner radio show and travels around the country offering financial education. His signature wit will have you laughing as you learn. For more from Peter, visit www.petetheplanner.com.
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