"I was too old for a paper route, too young for Social Security and too tired for an affair."
- Erma Bombeck, American humorist (1927-1996)
Social Security Tips
1. Set up a secure personal account at www.ssa.gov.
2. Know your benefit numbers. You may want to wait to claim.
3. Look into spousal and survivor benefits if you are divorced or widowed.
4. Social Security eligibility applies to same-sex couples, if they live in states that recognize the union.
5. Before making a decision about Social Security, consider your health and life-expectancy, income now, and in retirement and tax issues to maximize lifetime benefits for you and your spouse.
BY JULIA ANDERSON
Retirement planning is only one of several reasons why women should create an online account at www.ssa.gov and find out more about what benefits could come their way from the federal Social Security Administration.
My friend Alan Edwards (left in photo), Social Security public affairs specialist in Portland, Ore. emphasizes that "Social Security is so much more than just a retirement plan. As you pay your FICA taxes on earnings during you working life you are preparing for retirement. But you also are buying life insurance and disability insurance,” he says.
There may be variables related to your age, your marital status, other personal circumstances and your physical health that could affect how and when you may receive benefits.
- If you are widowed and disabled, you may be eligible for survivor benefits on your deceased husband’s work record as early as age 50.
- If you are divorced but were married to someone for 10 years or more, you may be eligible for a benefit on your ex-spouse’s work record. That’s if you are 62 or older and have not remarried. If they have died, you may be eligible for survivor benefits.
- As a married couple, you may be able to maximize your Social Security benefits by having one of you claim on the other’s work record while your spouse files but suspends benefits until age 70.
Avoiding Social Security surprises
“The No. 1 and most important thing for people to know about Social Security is their ‘numbers,’” Edwards said. “It’s essential that people know what benefits they are eligible for and how they are calculated. Women are often surprised that their work record may not qualify them for benefits or that their benefits are lower than expected.
The minimum work requirement for Social Security is 10 years but it’s your lifetime of work -- the highest 35 years of earnings -- that Social Security looks at to determine your benefit
To figure all this out, Social Security offers an online calculator that tells you what your monthly benefit will be depending on when you start taking a payout.
gain, this is worth checking out because the longer you wait, the more your benefit will increase up to age 70.
For example: If you monthly full retirement benefit at age at 66 is $1,021, it is reduced by 25 percent to $766 month, if you start benefits at age 62. Benefits jump to $1,669 if you wait to age 70 (or an 8 percent a year increase for each year you wait beyond your full retirement age). It’s important to know your numbers, Edwards said.
Benefits based on marriage
Calculating benefits based on marriage is among the more complex areas of Social Security planning. Depending on whether your ex-spouse is alive and has filed for benefits or is deceased and whether you are single or remarried are factors in what benefits you might claim on an ex-spouse’s work record.
“Depending on your own work record and earnings as well as your age, you may be eligible for up to half of the benefit of an ex-spouse,” Edwards said. “If your ex-spouse is deceased, there’s a survivor’s benefit.”
Edwards agrees that figuring out benefits related to a divorced ex-spouse is confusing but it’s worth sorting out. If you are disabled or if the ex-spouse dies, for instance, you may qualify for certain benefits on his or her work record.
“We encourage people to check back in with us if something in their life changes,” he said. “It’s important to screen for all types of benefits. We look at the situation and then evaluate what’s out there.”
With Social Security everything has moved to the Internet. The agency no longer mails out annual benefits estimates but instead asks Americans to create their own secure online account where they can get up-to-date information on their estimated retirement benefits and work record.
Even though retirement may be a long way off, it’s a good idea to check the account to make sure no one is committing fraud by using your Social Security number to collect benefits or to work using your number, Edwards said.
“You can easily see estimates for each benefit category and at the same time you get a lot of good information about programs in a simplified format without hunting all over the place,” he said. “If you’re already receiving benefits but still working part-time, it’s important to make sure those earnings are posted correctly. If it looks like someone is using your Social Security number, contact us immediately.”
Low-income people can use their Social Security account to verify benefits for purposes of applying for subsidized housing, for energy assistance or veteran’s services. Through the online account, you can print out your personal verification of benefits letter to help qualify for these services.
Same sex couples benefits
With the federal U.S. Supreme Court ruling this year on same-sex marriages, there is no federal ban on Social Security paying benefits to same-sex couples, Edwards said.
“We may not be able to process applications in some states because of state law but there’s no ban on benefits,” Edwards said. “It depends on where they were married and where they now reside. We defer to the state on marriage and divorce action so same-sex marriage legality is still state by state.”
Meanwhile, those turning 65 must sign up for Medicare through the Social Security Web site at www.ssa.gov. Even if your full-retirement age for receiving benefits is 66 or 67, Medicare eligibility sign-up is required at 65.
“Your really don’t want to get caught without it since there are penalties,” Edwards said.
Meanwhile, knowing how much your Social Security benefit will be is an important part of the retirement planning puzzle.
And don’t rely on friends or even financial planners and investment advisers to have all the Social Security ins and outs, Edwards said. Each situation is different and what might work for your cousin may not be the correct formula or the right strategy for you. Social Security was never intended to be your only source of income when you retire but it certainly is a key factor in your planning.
With Baby Boomers celebrating their 65th birthdays and attending their 50th high school class reunions, it’s no surprise that the Social Security Administration is processing 10,000 retirement applications a day.
Helpful Web siteswww.ssa.gov for benefits, planning information.
www.aarp.org Social Security calculator.
www.wife.org for retirement planning for women.
www.bedrockcapital.com click on SSAnalyze.
www.kiplinger.com Strategies to boost your Social Security.
www.fidelity.com Social Security tips for couples.
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