Social Security Super Secrets For Married Couples

Posted on January 25, 2012 by TJ Wall

Social Security may be broke and busted but it’s still writing checks; get all to which you are entitled before it changes.  Here are three "super secrets" for married folks:

1.     Pick which retirement you want; yours or your spouse’s.  Obviously select the one that pays you the most.  Often in a marriage there is a huge difference in wages.  But even if the lower wage earner worked and has their own Social Security benefit, he or she may elect to receive an amount equal to half of their spouse’s instead.  This is called your Spousal Benefit.

2.     Double dip.  A person who has reached full retirement age could elect to take his or her Spousal Benefit and delay taking their own Social Security benefit.  Working or not, take your Spousal Benefit and delay your own and let it grow until you’re age 70.  It doesn’t matter if your spouse is taking their Social Security benefit or not.  Upon age 70, if your own benefit is higher than the Spousal Benefit you’ve been receiving, just swap and take your own.  That’s more money for you now and potentially more money for you later.

3.     Getting paid to wait.  Typically, when one spouse hasn’t worked outside of the home as much as their mate, she won’t have much, if any, Social Security benefit and will default to receiving her payments when her higher earning spouse retires and decides to start taking Social Security payments.  Do not wait.  Once both spouses reach full retirement age, the higher earner (the husband in this example) should go ahead and file for his Social Security benefits.  Then the lower earning wife files for her Spousal Benefit and, step three, the husband immediately suspends his Social Security benefit request.  His benefit amount will continue to increase (by about 8 percent per year) and then when he reaches age 70, he can re-file to start taking his Social Security retirement benefit.  This will give the wife free monthly money instead of thinking she must wait until hubby fully retires and takes a check from Social Security before she can…very cool idea.

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Social Seurity Payments Will Remain Flat In 2011

Posted on November 18, 2010 by TJ Wall

The after-effects of the Great Recession are about to squeeze retirees where it hurts: the monthly Social Security check.

If you have not yet heard, for the second consective year, seniors won’t get a Social Security cost-of-living raise in 2011.  A recent article in retirementrevised.com explains the rationale behind the governmment's decison to keep social security payments at their present levels.

By law, Social Security passes along an annual cost of living adjustment-or COLA-to recipients. The increase is tied to a broad measure of inflation in the economy and, up until 2010, a year had not gone by since Social Security was created in the 1930s without a COLA.

The situation might look like a wash at first glance; if consumer prices are down, seniors don’t need a raise, right? But retirees are impacted disproportionately by a sub-set of prices that tend to rise more quickly than inflation in the broader economy-health care, energy and transportation. They’re also grappling with the bad timing of falling home values and investment losses at a time when many need to tap those assets.

The result is that the vanishing COLA will squeeze many retirees hard. Social Security provides, on average, about 39 percent of income for retired households, according to AARP. More than 50 million people receive benefits.

A general decline in the financial picture of seniors is well underway; a recent survey by the Pew Research Center showed that more than a third of seniors have cut their household spending in the past year; nearly 40 percent said the recession has caused stress in their families; a majority (56 percent) said the recession “probably will make it harder for them to take care of their financial needs in retirement.”

 

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