Joe Anderson
ABOUT Joseph

As CEO and President, Joe Anderson has created a unique, ambitious business model utilizing advanced service, training, sales, and marketing strategies to grow Pure Financial Advisors into the trustworthy, client-focused company it is today. Pure Financial, a Registered Investment Advisor (RIA), was ranked 15 out of 100 top ETF Power Users by RIA channel (2023), was [...]

Alan Clopine

Alan Clopine is the Executive Chairman of Pure Financial Advisors, LLC (Pure). He has been an executive leader of the Company for over a decade, including CFO, CEO, and Chairman. Alan joined the firm in 2008, about one year after it was established. In his tenure at Pure, the firm has grown from approximately $50 [...]

Andi Last

Andi Last brings over 30 years of broadcasting, media, and marketing experience to Pure Financial Advisors. She is the producer of the Your Money, Your Wealth® podcast, radio show, and TV show and manages the firm's YouTube channels. Prior to joining Pure, Andi was Media Operations Manager for a San Diego-based financial services firm with [...]

Published On
January 4, 2022

Joe and Big Al help you figure out how to get the biggest Social Security payment possible, whether you’re married, divorced, or entitled to survivor benefits. Can you still file and suspend? What’s a restricted application? What the heck does “deemed” mean? Plus, learn about the little-known family Social Security benefits. The first YMYW podcast of 2022 is a compilation of answers to all of your most recent spousal Social Security questions.

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Show Notes

  • (00:46) Can I Switch to My Ex-Spouse’s Social Security Benefits? (Mary)
  • (05:55) I’m Divorced. Can I Claim Social Security Benefits On My Ex-Spouse’s Record? (Debbie)
  • (09:07) Should I Take Ex-Spousal Social Security? (Sharon, Waukesha, WI)
  • (13:44) When Can My Spouse Take Spousal Social Security Benefits? (Thomas)
  • (16:34) Spousal Vs. Survivor Social Security Benefits (Dave, AZ)
  • (25:57) Social Security Survivor Benefits (Jim, San Diego)
  • (28:46) Survivor Social Security Clarification (Perry, Jersey)
  • (33:45) Can Survivor Social Security Benefits Be Taken to Pay Debts? (Karen)
  • (35:02) Family Social Security Benefits and the Affordable Care Act Subsidy (Edward, VA)

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Today on Your Money, Your Wealth® podcast 359, Joe and Big Al are gonna help you figure out how to get the biggest Social Security payment possible, whether you’re married, divorced, or entitled to survivor benefits. Can you still file and suspend? What’s a restricted application? What the heck does “deemed” mean? The first YMYW podcast of 2022 is a compilation of answers to all of your most recent spousal Social Security questions. Go to YourMoneyYourWealth.com and click Ask Joe and Al On Air to send in your money questions as an email or a voice message, and don’t forget to tell us where you’re from, when and where you listen, and what you’re drinking! I’m producer Andi Last, and here are the hosts of Your Money, Your Wealth®, Joe Anderson, CFP® and Big Al Clopine, CPA.

Can I Switch to My Ex-Spouse’s Social Security Benefits? (Mary)

Joe: So now it’s Mary’s turn: “Mary. And my question is, if you’re retired and I’ve been collecting benefits since I was 62 and that’s quite a few years ago, but now I’m looking to increase my income. Can I switch to my former spouse’s Social Security benefits? And we were married 10 years. If you can answer that question. Thank you.”

Joe: Hmm, interesting. OK, so Mary’s 62-

Al: Well, she’s been collecting benefits since 62, and that was quite a few years ago.

Joe: OK.

Al:  She says.

Joe: And so now she’s like, hey, I want a little bit larger benefit.

Al: Yeah, yeah. And can I switch to my former spouse’s Social Security benefits? Because she’s been married 10 years or more. Which is important. If it’s 10 years or more, the answer is yes. If it’s less than 10 years, the answer’s no.

Joe: What do you think, Al?

Al: Yeah, you can. But the question is, is the former spouse living or not? and are they Social Security age? So there’s a few questions that you’d have to answer to figure out what the benefit could be and whether it makes sense.

Joe: So she claims the ex-spouse’s spousal benefit. So that is going to be 50% of the full retirement age. But she’s already claimed at 62.

Al: I know. So it’s going to be reduced.

Joe: It’s going to be 33% of his benefit.

Al: Well, right. Because had she waited for full retirement age, she’d get the full 50% of that benefit.

Joe: But since she claimed at 62, she’s going to have a reduction of the spousal benefit.

Al: Correct. But now what if that other spouse had passed away? the former spouse had passed away?

Joe: So then the survivor benefit is what you’re getting then.

Al: Yes, right.

Joe: So if he’s deceased and married for 10 years and she has not remarried, then she would be eligible for the survivor benefits.

Al: Which is the whole thing.

Joe: Correct. Which I don’t know if he’s- do we know if he’s dead?

Al: It doesn’t say.

Andi: She didn’t tell us.

Al: That’s what I’m saying, we need- or, what if Mary married a young guy, maybe he’s only 55.

Joe: And hasn’t claimed his benefit.

Al: Yeah. Because he can’t. So then the answer’s no.

Joe: So to claim a spousal benefit, the person needs to be claiming. But it’s a divorced spouse.

Al: Right. If it’s a divorced spouse, I think it’s that if the person is eligible to claim.

Joe: Correct. They don’t have to claim, but they’re eligible.

Al: Right. Which means they have to be at least 62.

Joe: But I think where the question comes in is that she wants to increase her income. Do you think her benefit at age 62 is going to be more or less than 30% of his full retirement age benefit? It’s probably going to be a wash.

Al: Could be. But we don’t know.

Joe: Or her’s might even be- we don’t know the numbers, of course.

Al: But that’s the thing, because sometimes people hear that and they think I can claim my former spouse’s benefit. If they’re living, it’s the spousal benefit, which is 50%, if you did it at full retirement age, which she didn’t, she did it at age 62. So it’s a reduced 50%, which is kind of where you’re at, the 33%- ish, somewhere in there.

Joe: So if Mary had any type of, even the median or average benefit, I would imagine that’s probably the same or-

Al:  On the other hand, if he’s passed away, then it’s the full benefit. And what’s interesting about Social Security is year by year, like let’s say you’re married 5 times, 10 years each, you can go back and forth. So you’re claiming the spouse on this one and oops, this one died. That’s a better fit. I’m going to switch to that one. And then the other one died that you’re getting the spousal, oh I’m gonna switch- you can make that switch whenever it is better for you.

Joe: So as long as you’ve been married for 10 years.

Al: Yeah, 10 year, per. So that’s a little tip.

Joe: Yeah. A little dating tip.

Andi: It’s too bad Social Security doesn’t just figure out what is the best for you and send it to you, you have to do all the work yourself.

Joe: Well you know how understaffed Social Security is. There’s 500- some odd thousand different rules with Social Security and how many claimants that they have. There’s no way. They’re not even allowed to give you advice. It’s like you trying to give- hey what’s the best claiming? You know, it’s like calling the IRS and asking them for tax advice. So they’re not going to give you any advice. They’ll tell you what the rules are. But that’s about it.

Andi: Hopefully they get it right when you call.

Joe: Right. But in most cases with Social Security, it’s tough. Their job is not to give advice. Their job is to tell you what you can and cannot do. Can I claim at 62? Yes. Can I claim at 67? You know what I mean? Am I eligible for this or that, that’s really their function, not necessarily to maximize the overall benefit. So hopefully that helps, Mary.

I’m Divorced. Can I Claim Social Security Benefits On My Ex-Spouse’s Record? (Debbie)

Joe: “My ex and I were married 35 years”.

Andi: This is Debbie, by the way.

Joe: Hi, Debbie. “He’s retired at 65. I’m still working. I’m currently 65, and hope to retire at 66 and a half. Can I receive spousal benefits on his and then when I retire, I claim my own benefits? We have been divorced for two years”.

Joe: So Debbie wants to claim the spousal benefit. The spousal benefit is half of her ex-husband’s benefit because they were married for more than 10 years. She has the right to claim the spousal benefit at age 65 or 62 doesn’t matter as long as he’s claiming his benefit, she’s good to go. But if she claims that benefit early, then she’s thinking, Hey, you know what? I’m going to let my own benefits continue to grow and so I’ll just take the spousal and then I’ll flip on and take mine.

Al: Yeah, and that’s what people used to do.

Joe: You could do that, but not anymore.

Al: It’s gone. That is gone because there’s the diem rule, which is very complicated. But basically in English, all that means is when you take your spousal benefit, then it’s as if you took your benefit up to a certain dollar amount and then that spousal benefit is just a little extra on top of that. Basically, you already took your benefits. You can’t then switch to a later benefit.

Joe: Correct.

Al: But I have a question. That’s for sure, true before full retirement age. Is that still the same at full retirement age to 70?

Joe: Well, the spousal benefit is half. Her benefit is going to be larger anyway. You know what I mean?

Al: So there’s no benefit.

Joe: There’s no benefit at all because her benefit is going to be larger. She’s been working 35 years and she wants to retire at 66 and a half. Her husband, they split up 2 years ago. The spousal benefit is half of his. So let’s say his benefit is $2000. Her spousal benefit is $1000 but she’s taking it at 65, so it’s going to be probably $980 because she’s taking it a year earlier than her full retirement age. Or, maybe her full retirement age is 66 and a half. That’s why she wants to retire at 66 and a half. So she’s claiming the spousal. I’m guessing her benefit is larger than the spousal benefit.

Al: Yes and I think what people used to do is they got, in essence, free money because they let their benefit grow while they’re getting spousal and the IRS… Or, I should say, our federal government. That’s too good of a deal. We’ve got to shutt that down.

Joe: What she wants to do is this. Let’s say her benefit is $2000. His benefit is $2000. She wants to claim the spousal benefit and get $1000 a month today. Then she’s going to turn her benefit on once she retires to the $2000 benefit.
She wants that $1000 spousal benefit until she turns hers on whenever she retires at 66 and a half. That was a strategy that we would recommend all the time. Unfortunately, probably what now, 4 years ago?

Al: Which probably means 6 years.

Joe: They got rid of that. So unfortunately, Debbie, you are out of luck.

Should I Take Ex-Spousal Social Security? (Sharon, Waukesha, WI)

Joe: We got Sharon writes in from Waukesha.

Al: Boy, I would have trouble with that one.

Joe: I don’t think that’s Waukesha. That’s Waukesha. That’s Wisconsin.

And: That’s Wisconsin. Yep.

Joe: Yeah, Waukesha.

Al: Waukesha.

Andi: Ok.

Al: I’ll go with that.

Joe: See? Give me some Wisconsin and I can nail it.

Al: I have no estimate on that one.

Joe: I think Bend is in Washington. It’s Oregon.

Al: It’s close.

Joe: Yeah. “Hi Joe and Al. l I drive a 2006 Honda Odyssey, approaching 300,000 very soon.”

Al: Oh my goodness. Good job Sharon.

Joe: “Although the pace to that number has slowed with Covid. I’m divorced. Was married to my ex for over 10 years. My question is on the ex-spousal Social Security benefit. My ex made about 50% more than I did over our past careers. I plan to take my Social Security at age 70. I’m 58. Would I qualify or is there any benefit in taking the ex-spousal Social Security? My ex is already drawing his Social Security. Your thoughts are appreciated. I haven’t found a lot of info on this topic and how to best approach the timing of the benefits considered my own Social Security plans. It looks like there was a change around the benefits a few years ago based on your age.” Yes, you are correct, Sharon from Waukesha. Well, let’s see, when does she want to take the spousal?

Al:  I’m going to assume she wants to take it at 62 because she’s only 58 now. I think that’s why she’s asking.

Joe: Well, she can take the spousal benefits at 62 because she was married to the ex-spouse for over 10 years.

Al: She can, is correct.

Joe: He’s claiming the benefit so she could claim the spousal benefit. But what they’re going to look at is her own benefit as well.

Al: Yeah, because it’s deemed on her. And then if there’s any little extra, then she gets that. But-

Joe: It’s going to be a 30% reduction from her full Social Security benefits. So she wants to claim at 70. So she wants to maximize the overall benefits. So in the olden days, she could claim the spousal benefit-

Al: – but she’d have to wait until full retirement age.

Joe: Correct. She would have to wait till full retirement  and they have a restricted application to file for the spousal.

Al: Which if she’s 58 now, that’s going to be 67. That’s her full retirement age.

Joe: Correct. So I would take a look at what the spousal benefit is at age 67 versus her own benefit. That’s what’s going to determine what’s going to make the most sense for her. Because it sounds like her ex-spouse made more money. But I’m not sure how much more because how the calculation is to determine the overall benefit as it’s weighed more on lower income than your higher income because Social Security taxes are only up to a certain point.

Al: So she says that he made 50% more. So let’s just say she made $100,000, 50% more would be $150,000. And the spousal benefit is based on half that- even the ex-spouse- so it would be $75,000. So just in terms of salary. So basically I think it would be less than her benefit. So I’m not sure there’s any way to game this, do you?

Joe: I don’t think so either without looking at the numbers. But I think you have a good illustration there, Al, that- what she’s wanting to do, Alan, is to claim the spousal benefit, let hers grow and then switch to her own benefit. Al: Which you used to be able to do that.

Joe: But you can’t.

Al: Yeah, not anymore. That’s probably-

Joe: That’s the answer.

Al: – 5, 6 years ago, they changed that. Something like that.

Joe: So, sorry Sharon.

There are over 2700 rules around claiming Social Security, so it’s no surprise that it’s difficult to keep track when they change things! Download our Social Security Handbook and figure out your best claiming strategy to maximize your monthly Social Security payments. This handbook explains who is eligible, how Social Security benefits are calculated, the difference between collecting early vs. late, working while taking Social Security, more details on spousal, ex-spousal, and survivor benefits, and how your Social Security is taxed. Download The Social Security Handbook and to listen to a past YMYW episode on spousal benefits with the Goddess of Social Security Mary Beth Franklin. Just click the link in the description of this episode in your podcast app then scroll down to free financial Resources. Then spread the love around: share the YMYW podcast and the resources with your friends and colleagues via email or social media.

When Can My Spouse Take Spousal Social Security Benefits? (Thomas)

Joe: Thomas writes in, “Assuming spousal benefits will be higher, can the spouse take their own early or FRA than later, when I take mine? Can they claim spousal benefits and receive the higher spousal versus their own? If so, is there a penalty to the spouse benefits if they take their own at 62?” That could have been better written, but-

Al: It is. This is your area of expertise.

Joe: Oh God. I got to get a new job. I am so tired of talking about Roths, Social Security, stock market, taxes –

Al: Do you want to get into the deeming rules?

Joe: – deemed-

Al: This is a-

Andi: You got to talk about restricted stock units? That was different.

Joe: Well, yeah.

Al: That was fun.

Joe: Yeah, that was a great time.

Al: It was for me, it was different.

Joe: “Assume spousal benefits will be higher”. So he’s saying, OK, for him?

Al: Higher than his own. Higher than his own benefits, I think is what he’s saying.

Joe: OK.

Andi: I believe that’s true.

Joe: All right. “Can the spouse take their own early or FRA then later when I take mine?” So the spousal benefit works like this Tom, is that you need to be claiming your own benefit before your spouse can claim spousal benefit if it’s higher than their own. So if the spouse claims their own benefit first and takes their own benefit and then you claim your benefit and then it goes to the spousal benefit, that’s exactly what would happen. However, if your spouse takes a benefit at age 62, the spousal benefit would also be reduced by that percentage. So hopefully that makes sense. I think I answered the question. He just kind of wrote-

Al: I think so. I think and I tell you, this got a lot more complicated about 5 years ago when the rules changed. So bummer Thomas, that’s the way it is.

Joe: But to repeat myself, you need to claim your benefit first before the spouse can claim the spousal benefit.

Al: That’s correct.

Joe: So he’s like let my wife take her benefit, is what he’s thinking.

Al: So she takes it early.

Joe: Takes it early at 62. And then I’m going to claim my benefit and then she’s going to claim the spousal benefit which is half my benefit. It’s true, but it’s not going to be half your benefit. It’s going to be reduced because she took her own benefit early.

Al: Yeah, it’s going to be reduced by somewhere between 25% and 30% depending upon when your full retirement age is.

Joe: Yes, because let’s say the spousal benefit is 50%. It’s going to be roughly 30% of your benefit, not 50% of your benefit. So that’s the calculation that you need to make.

Spousal Vs. Survivor Social Security Benefits (Dave, AZ)

Joe: We got Dave from Arizona writes in. A couple from Arizona back to back, Al.

Al: Right. How about that?

Joe: “Joe, Al, Andi, love the show. Thanks for the great info. My question today is regarding when to take Social Security. My wife is 10 years older than me. We are still several years away, but I was using the open Social Security calculator on open Social Security dotcom recently and identified that the best strategy based on our present value calculation is for my wife to take Social Security at age 70 and for me to take Social Security at age 62.

For reference, we both have about the same number of working years and our expected primary insurance amount are about the same in full retirement. If she outlives me, then no issues and she will continue to take her max from age 70 on. However, the calculator seems to be lacking in its ability to approximately calculate a scenario whereby, for example, I take my Social Security at 62 and my wife takes hers at 70 and then my wife passes away, heaven forbid, when I’m 63.” Oh, man. See how I’m building up the excitement here, Al?

Al: It’s crazy. I’m just on pins and needles.

Joe: We’re making Social Security fun here bro. “In this scenario, how are survivor benefits calculated related to my reduced primary insurance amount because I took it at age 62? The calculator seems to imply that I would continue to receive my reduced age 62 PIA benefit, plus a survivor benefit that would combine top-up to equal the full benefit that my wife was receiving before she passed away. Would the survivor benefit for me be reduced if I’m only 63 and I haven’t yet fully reached full retirement age? Or does it really top-up to my wife’s full PIA benefit regardless of my age is as long as I’m over 60? I’m worried that if something happened to her between the time that I am 62 and my full retirement age, the calculators recommendations are not correct and I will thus be subject to taking my reduced ongoing benefit and a reduced survivor’s benefit in perpetuity. I’m very leery of taking Social Security at age 62 due to the reduced benefit and would prefer to wait till at least 67 to avoid the situation that I described. Thanks in advance and look forward to hearing your feedback. I love the show.” So the scenario is he got on a calculator; wife’s older; wife takes it at age 70. The difference between taking it at age, let’s say full retirement age and age 70 is about- what is it- like 130% increase. You get an 8% delayed retirement credit each year that you wait. So there’s a difference between the survivor benefit and a spousal benefit.

Al: Yeah, I think he’s got those mixed up.

Joe: So a spousal benefit is that you could claim half of your spouse’s benefit as long as your spouse is claiming a benefit. So let’s say she claims her benefit at age 70, he turns age 62. Before he could just claim a spousal benefit, which would be half of her benefit at age 67 or 66, whatever full retirement age is, but with a penalty because he took it at age 62. However-

Al: That was the old rule.

Joe: – that was the old rule. Now it’s called what- deemed?

Al: The deem rule.

Joe: If he takes it at 62, she’s taking that 70. It’s going to take a look to say, hey, you take the spouse benefit or your benefit or both. It gets complicated. But what’s the rules on a survivor benefit, Alan?

Al: Survivor is completely different. You get your benefit or your spouse’s, the deceased spouse’s benefit, whichever is higher, without regard to when you took yours. So it’s completely different rules. So the calculator appears to be right in this case.

Joe: So he takes his at 62, she takes hers at 70, her age 70 benefit is a lot larger than his age 62 benefit. So what he’s thinking is that, oh God forbid she passes away. He claimed his benefit early. He’s going to be penalized for life or in perpetuity. In perpetuity, Al.

Al: That’s a long time, Joe.

Joe: That’s a very long time. And so he’s like, I don’t want to be cut with this lower benefit. I want to just wait until age 67. But if he takes his benefit at 62, she takes her age at age 70, she dies. He takes a higher of the two.

Al: Yeah, that’s right. It’s not reduced. So he takes the higher the two. So, Joe, I would say generally I like this strategy, given Dave’s situation with maybe one exception, and that is if both Dave and his wife believe they have exceptionally long life expectancy, they probably would do better both to wait till 70. But of course, you don’t know. That would be a reason why Dave might wait longer. But in terms of hedging your bets, and I guess they had about the same number of working years and same salary. So the benefits are about the same. So generally, we like to say that that the spouse that has the higher benefit, you wait as long as you can to collect. In this case, age 70 is the longest. And then the second part is that the spouse that’s the oldest. In this case, the wife. They both have roughly the same income, but that spouse is older. So, yeah, I agree with the strategy. Unless they both feel like they have a long life expectancy, then they might want to rethink.

Joe: I would have to look at the numbers, but I think this is the right strategy, to be honest, because she’s probably going to outlive him anyway.

Al: Well, I’m saying if she lives to 100-

Joe: And he lives to 110-

Al: – and he lives to 90 or whatever.

Joe: Right, right. Right, right.

Al: Then in other words, he’s going to do better waiting for his benefit at age- because by age 82- 81, 82 is where the breakeven is. That’s all I’m saying.

Joe: Here’s a couple of other things. So, Dave, to answer your question, what you need to understand is that there’s two rules in regards to a survivor benefit and spousal benefits. You’re getting those two things confused. So survivor benefit, if she passes, you’re going to receive what her benefit was. So the larger benefit that she took at age 70 will be your benefit. You lose your benefit. So it goes to two benefits to one benefit. Because of that fact alone, they’re saying the surviving spouse will get the higher of the two because you lose a benefit. So that’s the whole strategy of Social Security planning is that you’re looking at let’s maximize at least one person’s, because if they die prematurely or the other spouse dies, someone’s always going to have that larger benefit. That is a survivor benefit. Are you worried about that? That’s it. 62. You claim it. I get it. You might live a little bit longer, but if you do the math, it might kind of run out. And let’s say at age 95, you probably get a little bit more money out of the system. But then you have to look at other planning. What’s your tax situation look like? Do you actually need the income? Does it make sense to push the income out? Because then you get a lot higher guaranteed income where you can live off of some of the other brokerage or retirement assets, maybe you do Roth IRA conversions. Arizona- I’m not sure how Social Security is taxed in Arizona. If it’s tax-favored like it is in California, it might make sense to have a larger guaranteed income for the rest of you and your spouse’s life while you live off of other assets. So looking at the calculator will show you what’s the most that you’re getting out of the system, but it doesn’t tell you how to maximize your overall net worth or cash flow. Would you agree with that?

Al: I agree with that. It gives you an idea of- it doesn’t really get into your health and other income. And you’re right, sometimes people take Social Security so early they not only have a reduced benefit, but now their income is too high to do Roth conversions in years where it would have made sense to do a lot of Roth conversions. So, yeah, you gotta- there’s a lot of factors that go over and above a calculator. I agree.

Joe: Yeah. Arizona does not tax Social Security benefits, so that’s another reason potentially to push that thing out. So. All right, Dave from Arizona, appreciate your question.

How and when to collect Social Security is one of the biggest retirement decisions you will make. You need to wring every possible cent out of the income you’re entitled to receive from Social Security, but that means coordinating when and how you claim your benefits with all the other aspects of your finances. Doing it wrong could be an expensive and long-term mistake. Go to the podcast show notes and click Get an Assessment to schedule a comprehensive analysis of your entire financial plan. One of the experienced financial professionals on Joe and Big Al’s team at Pure Financial Advisors will help you make the right choices before you claim your benefits. Click the link in the description of today’s episode in your podcast app, then click “Get an Assessment”.

Social Security Survivor Benefits (Jim, San Diego)

Joe: Jimmy, in San Diego. “Hi Joe, Big Al and Andi. I drive a F-150 pickup. Enjoy Stone Brewery IPA and we adopted a little German short haired pointer”.

Joe: Okay. I wonder if he’s like a hunter? Yeah, he’s got the F-150, gun rack. I could just see Jim. He’s got like a skull hat on.

Al: Not much to hunt in San Diego.

Joe: Oh, there’s plenty.

Al: Rabbits?

Joe: Coyotes.

Joe: “I have a question regarding Social Security benefits. As a hypothetical example, If my wife and I both start taking Social Security retirement benefits this year, I’m 70 years of age and receive $3000 per month in retirement benefits. My wife is 62 years of age and receives her own benefit of about $1000 a month. If I were to pass away shortly thereafter, would my 62-year-old wife receive the $3000 higher of the two benefits as a survivor benefit or would it reduce due to age? Thanks for your time. Enjoy the podcast every week”.

Joe: Very good question Jim. If you take your benefit at age 70, as Jim did. He receives an 8% delayed retirement credit each year that he waits after retirement.

Al: That would be the maximum he’ll get. Wait till age 70.

Joe: You got it and his wife was like, you know what? I’m starting, I’m not waiting. I need some walking around money. So she takes hers at 62. Then, Jim’s hunting, he’s drinking a little IPA, and the next thing you know, boom. Something happens. Bad news for Jim. But good news for the wife. Yes, she would receive the higher of the two benefits, even though she claimed her benefit early and received a 24% reduction on her own benefit. You would always take the higher of the two, so the strategy usually always is, the one with the higher benefit would wait as long as they possibly can, because then the surviving spouse would then receive that higher benefit for his or her life.

Al: Yeah, and that’s different than the spousal benefit. Because that does get reduced if you take it early, but survivor’s different. You lose your spouse, you get the higher of the two benefits. Simple as that.

Joe: You lose your spouse. That’s the bad news.

Al: The good news is you get his or her Social Security.

Joe: So some people are like, really? Ooh, we’re going to put a little crystal oil on the bathroom floor.

Al: And it gets more interesting than that because you could get your ex-spouse’s benefit, too.

Joe: Yes. If you were married for 10 years or more. So a lot of different rules about Social Security.

Survivor Social Security Clarification (Perry, Jersey)

Joe: We got Perry from Jersey. I don’t know where to even begin with this question, so maybe I skip Jersey. Is that how he wrote the question, Andi?

Andi: Yes, it is, yes. The first part is from the Social Security website.

Al: He’s quoting the Social Security website, and then he is suggesting that it seems like it conflicts. So he’s asking which one is right. It’s actually not bad. Give it a shot.

Joe: This is from the Social Security. It says “SSA form. If you are a survivor/SSA.

Al: OK, that’s the heading. So he went to the Social Security website-

Joe: Cut and paste?

Al: And saw that heading. And then it says ‘these are examples of the benefits that survivors may receive’. Then he gives a couple.

Joe: All right. “Widow or widower full retirement age or older. 100% of the deceased workers benefit amount.” So if I’m a widow or widower at full retirement age or older, I would receive 100% of the deceased worker’s benefit amount. You agree with that?

Al: Yes.

Joe: “Widow or widower, age 60, full retirement age, 71.5% to 99% of the deceased worker’s basic amount. The first bullet seems to say 100% of deceased worker’s benefit amount, which I read as including any delayed credits to perhaps 70 years old. The second bullet seems to say if a survivor is not at their full retirement age, then the survivor gets a reduced percentage of deceased worker’s basic amount. Basic amount is never defined. But it seems to me PIA, with no delayed credits included. Am I reading English correctly? You’re loyal and obedient servant, Perry.” Oh Perry. That’s why he’s writing this thing all weird. He’s got a dog named Heinz 57.

Andi: No, that means that it’s a mutt. Heinz 57 means that it’s all types.

Joe: Al and I are going with it’s a name.

Al: I think it’s the perfect name. That’s what I would call it. Hey, Heinz, 57, that is, come over here.

Joe: He’s got a 2013 SUV. “YouTube makes this subject clears as mud.” I believe this is stating if the person died prior to the widow or widower reaching a benefit age where they could collect- So let’s say you pass.

Al: Let’s say I waited till 70. So I’m collecting my benefits, I pass at 75, does Andi get those benefits? So that includes obviously the delayed retirement credit. And the answer is yes.

Joe: Correct.

Al: Because when one spouse passes, the survivor gets the higher of the two benefits that are currently being paid.

Joe: That is correct. But you can claim a survivor benefit as early as age 60.

Al: Yeah. So let’s say I’m 75 and then let’s say my wife, Anne, is 59. And so she claims that at 60 instead of waiting to her full retirement age, then it’s a reduced benefit for life and I think that’s right. 71.5% I think in that example. But I think it’s 71.5% of my total benefit, not of what I was receiving.

Joe: Correct.

Al: I don’t think basic means you don’t get the-

Joe: They would say a full retirement age amount. The FRA-

Al: That’s what I think. I think that it’s 71.5% of whatever my benefit was when I was 75.

Joe: Because the rules changed quite a bit there as well. Where you would want to- because this happened to my mother, is that she was still working. My dad died at 61 and then she’s like, she could claim the benefit at 60, but it didn’t make any sense because it still had the same reduction if you had earned income. And it’s like take it at full retirement age, so then you don’t get the reduction of income, push yours out until age 70 and flip it that way. Yeah, it’s clear as mud, Perry.

Al: I will say this, Perry, almost nothing about Social Security is very clear. It is one of the most complicated things you can imagine.

Joe: Next time, ask me a question. “Hey, my wife died. What benefit can I receive?” But don’t go to the Social Security website, start cutting and pasting crap and then sending it to me. So I got to decipher what the hell all this means.

Can Survivor Social Security Benefits Be Taken to Pay Debts? (Karen)


Family Social Security Benefits and the Affordable Care Act Subsidy (Edward, VA)

Joe: All right, we got Edward from VA.

“I’m an avid listener of the financial podcast and don’t think I’ve ever heard anyone talk about this subject. So here it goes.”

See, avid listener of all financial podcasts? Or our financial podcast?

Andi: He says financial podcasts, so probably many.

Al: That would imply all I would say.

Joe: OK. I guarantee he’s going to ask a question that we’ve talked about a million times. I’m curious about a backdoor Roth.


Al: Right?

Joe: All right. Let’s see what Edward has for us.

“I’m 53 years old and my wife is 40. We have a one-year-old son. I recently read that there are Social Security benefits for children of retired persons, along with benefits for spouses of retired persons who is caring for a child. When I turn 62, my wife will be 49 and our child will be 10. It seems like a no brainer to take Social Security benefits early since my child, who will be then 10 years old, can collect 50% Social Security benefit based on my full retirement benefit until he is 18, and my wife can collect 50% Social Security benefit based on my full retirement benefit until our son turns 16. This will more than double our family’s Social Security benefits for year 62 to 68 and still provide a nice little bump for two additional years until my son turns 18. Am I missing anything here? I realize this section of the Social Security Code doesn’t affect too many people, but anyone who has a child in their late 40s or early 50s could benefit from this knowledge.”

Al: OK. What do you think?

Joe: Just thinking about something, that’s all. I’m going to be right there with Edward someday.

Al: I wasn’t going to say anything.

Andi: First you have to get married and stuff, Joe. You know, there’s steps to this.

Joe: And then I’ll be like 62 with a five year old.

Al: Yeah, I will say I know at least, Joe, two other people that are older dads than you.

Joe: How about Donald Trump? We talked about this before. Little, what’s his name?

Andi: Little, what’s his name?

Joe: So, Edward, OK, so yes, he’s right. He’s done his research. And yeah, but there’s a family maximum. So, I don’t know exactly how to calculate what the family maximum is. I know that it’s kind of a unique calculation, but he could exceed the family maximum here. I’m not sure.

Al: You could, and I think I would agree with you, Joe. I think on the surface it’s a no brainer, just like Edward says. But you know what? There still would be a break even point. You know, maybe it’s 85 or 90. Maybe Edward or his spouse, they’re going to live forever. So there’s still a break even point, but probably it’s a much later break even point than most people.

Joe: Yeah, without question, because I think people are getting married later in life and having kids later in life, and so, looking at all these different Social Security benefits is key. So, yes, as long as you collect your overall benefits, you’re going to take yours early, you’re going to take a haircut at 62 because you’re full retirement at age of 67. So you’re going to receive a 30% haircut on your full retirement benefit; however, you’re going to receive a benefit for the family. But it is subject to a family maximum, so Edward, I would kind of double check what that family maximum is given your situation.

Another question Edward had in retirement. “I’ll be collecting a public school pension of $70,000 a year, plus my age 62 Social Security, along with getting health insurance through my school system until 65 for myself. My wife and son will be on their own for health insurance since my wife will not be working. Her only income will be 50% Social Security benefits she receives until her son turns 16. She receives that for six years. Should we file our taxes separately so she can qualify for Obamacare subsidies?” It’s called the Affordable Care Act. “Thank you for all your information, expertise and humor.”

All right, so he wants to kind of split his little pie here. What do you think, Al, should he file separately so she can get subsidies?

Al: Well, it might work, Joe. I do know in California it would not work because California’s a community property state, and all income is split 50-50, regardless of who earns it. But I don’t think Virginia is a community property state, so I’m not sure what kind of special rules they might have on income splitting, so to me, that would be a question for an in-state CPA that understands how the married filing separate works in your state I would say.

Joe: Yep, I would agree with that. He’s also collecting a public school pension, so I would just double check on that because, again, we’re not experts in Virginia, but here in California, the CalSTRS system, teachers in our public school systems do not receive Social Security because they don’t put any money into the Social Security system. Even if they have put money into the Social Security system, they are subject to WEP, which is windfall elimination provision. So just a couple of things else to look out for, Edward. Appreciate the question.


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