Social Security may be one of your largest assets. What and when you collect will make a huge difference to your lifetime benefits.
Today's Ask Larry column examines requirements for filing for a divorced spousal benefit among other questions.
You can submit a question by clicking on the link on our homepage at Maximize My Social Security.
Can I Take My Benefits In A Lump Sum?
Hi Larry, I am a 64 year old disabled person drawing disability benefits of about $1500.00 a month. I also receive $3600.00 each month from VA. Can I withdraw from the Social Security system after I apply for a one time lump sum payment based upon the average time I will Live and or can I make a one time lump sum withdrawal for say one year, two years or 5 years to either help with a downpayment on a new home and or to fund a lawsuit I am preparing to have to litigate in order to sue for denial of our ever important civil rights? Thanks, David
Hi David, assuming you are single, your only move at this point is to wait till 66 and then suspend your retirement benefit (your disability benefit is renamed your retirement benefit at 66 when you reach full retirement age). You can then restart it at 70 at a 32 percent higher level adjusted for inflation. There is no lump sum benefit payment available to you either now or in the future. Best, Larry
When Should I Take My Retirement Benefit?
Hi Larry, my husband's birthday is 5/1952 so he turned 62 before January 1, 2016. My birthday is 6/1954, so I did not turn 62 until after the January 1, 2016 cutoff date. Our plan is for me to apply for my retirement benefit, which will be much lower than my husband's, when I turn 66. At that time my husband will be 68 and he can collect his spousal benefit, then when he turns 70 we switch. He will start collecting his retirement benefit and I will switch to my spousal. Is this still legal under the new rules? Thanks, Iona
Hi Iona, this is legal under the new rules, but it may not be the best strategy for maximizing your lifetime benefits. Run expert software to see what is best as you may be leaving tens of thousands of dollars on the table. If you own retirement benefit is low enough compared to your husband's, it may be best for you to take your retirement benefit right now or perhaps when your husband turns 66. This will maximize the spousal benefit he can collect on your work record. It will mean your own retirement benefit will be permanently reduced and that when he reaches 70 your total check will be smaller. (It will consist of your reduced retirement benefit and your unreduced excess spousal benefit.) But the loss to you could be outweighed by getting him spousal benefits for a longer period of time. Best, Larry
Does My Husband Have To File For His Retirement Benefit For Me To Collect My Spousal Benefit?
Hi Larry, I turned 66 in April. My husband is 64 and still working. We wanted him to file and suspend so that I could get the spousal benefit. But since he is not 66, it appeared I did not qualify. Is that correct? Must I wait for him to retire to get my spousal benefit? Thanks, Candy
Hi Candy, yes you have to wait for him to take his retirement benefit for you to take your spousal benefit. But your husband can file now for his retirement benefit, letting you start just your spousal benefit now, and then when you reach 70 you can take your own retirement benefit. Also, when you become 70, your husband can suspend his retirement benefit and restart it at 70.
Now is the above optimal? This depends on your specific earnings histories and maximum ages of life. You will need to run expert software to find out what's best to do. But it's highly unlikely that your particular proposed strategy maximizes your joint lifetime benefits since there are likely tens of thousands of alternative strategies that our program will examine. Best, Larry
If I Marry, What Benefits Can My Wife Collect?
Hi Larry, I am 74 years of age. I was married for 30+ years before I was divorced 5 years ago. I am planing on marrying again to a 66 year old woman later in the year. Is she eligible to claim any spousal benefits when we marry? What happens if I die? Thanks, Barry
Hi Barry, if she hasn't taken her own retirement benefit she can, after one year collect a full spousal benefit (equal to half of your full retirement benefit) and then take her own retirement benefit at 70 when it maxes out. If she has already taken her retirement benefit, the spousal benefit she'll get starting in a year is her excess spousal benefit equal to half of your full retirement benefit less 100 percent of her full retirement benefit augmented by a year's delayed retirement credits. The excess spousal benefit, if negative, is set to zero. So the answer could be that your wife to be can't collect anything on your work record while you are still alive. If you die after at least 9 months of marriage, your new wife will be able to collect a widow's benefit on your work record. It will equal your check. If this widow's benefit exceeds her own retirement benefit she will get it instead of her retirement benefit. Best, Larry
When Should My Husband Apply For Spousal Benefits?
Hi Larry, I am 69 receiving Social Security benefits - my husband is 63 (turned 63 in March 2016) and still working part time (income 30k) and is not retiring until 70. My question is: can he apply for spousal benefits? Thanks, Mary Jane
Hi Mary Jane, your spouse can collect a full spousal benefit for four years if he waits till 66 to file for it and doesn't take his own retirement benefit till 70. If he files for his retirement benefit before 66, he'll be forced to file (deemed to be filing) for his spousal benefit as well and his spousal benefit will be calculated as his excess spousal benefit. This could be zero. Best, Larry
Does My Ex Have to File and Suspend For Me to Collect Spousal Benefits On His Work Record?
Hi Larry, I'm 67, female and had to take Social Security at age 62 as I was unemployed and divorced after 23 year marriage. My ex spouse is 3 years younger, age 64. He is single. My question after visiting Social Security in April is can I ask my divorced spouse to apply and suspend so that I may be entitled to a portion of his higher earnings record now? Thanks, Carol
Hi Carol, your ex doesn't have to do anything for you to collect a divorced excess spousal benefit on his work record. You can suspend your own retirement benefit and collect just this excess spousal benefit and restart your own retirement benefit at 70. The question is whether your divorced excess spousal benefit is positive or whether it's zero? We also need to know if your divorced excess spousal benefit would be zero at 70 were you to suspend your retirement benefit and restart it at a higher value at 70. If it is zero, then suspending your retirement benefit now may make sense. If it's positive, it won't make sense.
I think you should run expert software and let it figure out what strategy is best. This is a complex calculation that expert software can figure out in a few seconds for you. Best, Larry
To learn more about your Social Security options, visit Maximize My Social Security.