SHOW NOTES: 2019-05-16 MiM

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Last Week’s Question of the Week: After the age of 70.5, where can you still contribute retirement monies into? Is it A) Traditional IRA or B) Roth IRA ?

ANSWER: You can contribute to a Roth IRA.

HOST: Since so many people depend on their future social security benefit for income, your topic today revolves around understanding how those benefits coordinate with your spouse or ex-spouse?

KLAAS FINANCIAL: This is a really important area that everyone planning for retirement should understand before they simply sign up to take their benefit. You need to understand your own specific benefit, so we often have our clients reach out directly to Social Security regarding their situation.

If you don’t have a spouse, then you can simply go to and calculate your own Social Security benefit at your FRA (Full Retirement Age) which is based on your birth year, or what the reduced benefit would be should you collect sooner.

But if you DO have a spouse or EX-SPOUSE, there are several things to be aware of with regards to collecting your Social Security benefit based on your spouse’s record. A Social Security “spousal benefit” is available to:

  • Current spouses
  • Widowed spouses
  • Ex-spouses

There are some eligibility rules for spousal benefits:

  1. Current spouses and ex-spouses (if you were married for over 10 years and did not remarry prior to age 60) both have eligibility for the spousal benefit.
  2. You must be age 62 to file for or receive a spousal benefit.
  3. You are not eligible to receive a spousal benefit until your spouse files for their own benefit first.
  4. Different rules apply to ex-spouses. You can receive a spousal benefit based on an ex-spouse’s record even if your ex-partner has not yet filed for his or her own benefits, but your ex must be age 62 or older.

NOTE: Taking a spousal benefit does not reduce or change the amount your current spouse, ex-spouse, or ex-spouse’s current spouse may receive.

HOST: How much can you get in a Social Security benefit if you collect off of your spouse’s record?

KLAAS FINANCIAL: As a spouse, you can claim a Social Security benefit based on your own earnings record, or you can collect a spousal benefit that will provide you 50 percent of the amount of your spouse’s Social Security benefit as calculated at their full retirement age (FRA).

You are automatically entitled to receive either a benefit based on your own earnings or a spousal benefit based on your spouse’s or ex-spouse’s earnings. Social Security calculates and pays the higher amount.

How Does Early Retirement Affect Benefits?

If you collect a spousal benefit and you begin collecting this benefit before you reach FRA, your benefit will be permanently reduced. If you collect any type of benefit before your FRA, and you continue to work and receive earned income, you may owe some of your Social Security benefits back. Once you reach FRA you can collect Social Security and earn any amount from working without being subject to any reduction in benefits or penalty.

If your spouse takes Social Security early, and you take a spousal benefit early, you will be significantly reducing the benefits that may be paid out over your lifetime and will have permanently reduced the survivor benefit for which either of you is eligible.

Before applying for spousal benefits, you should understand how your spouse’s benefit may be affected if you take your Social Security benefits early, and what happens upon the death of a spouse. 

What you need to know about a restricted application: There is something people have heard of which is choosing to receiving a spousal benefit based on a restricted application. If you were born on or before January 1, 1954, after you reach FRA, you can choose to receive only the spousal benefit by filing a restricted application. By doing this you delay receiving your own retirement benefits based on your earnings record, until a later date. For example, at age 70 you could switch from receiving a spousal benefit to receiving your own potentially higher benefit amount. If you were born after January 2, 1954 then you will not be able to restrict your application and receive spousal benefits, due to a change in social security laws that went into effect Nov. 2, 2015.

HOST: What happens to a couple’s social security benefit when someone passes?

KLAAS FINANCIAL: That’s a great question. If you become a widow or widower, upon the death of your spouse, you will continue to receive your benefit, or your spouse’s, but not both. In addition, a surviving spouse living in the same household is eligible to receive a one-time lump-sum payment of $255 upon the death of a spouse. But after the second person that passes, SS does not pay out a second benefit to the estate.

You can collect a survivor’s benefit as early as age 60. Widows and widowers can restrict their application to file for either their own benefit or the widow/widower benefit, and then later switch to the other benefits amount. You might do this if your own benefit amount at age 70 would be larger than your widow benefit. You could claim the widow benefit for several years, and then at age 70 switch to your own benefit.

When married couples choose to maximize the highest-earning spouse’s benefit by having that person delay collecting until age 70, it acts as a powerful form of life insurance. In many cases, it provides the equivalent of $50,000 to $250,000 of life insurance benefit.

Overall, married couples can optimize their Social Security benefits by working together and making decisions that maximize their spousal and survivor benefits. Too many couples overlook this strategy and end up getting less lifetime income.

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Catch C.J. Klaas and Maleeah Cuevas on Money in Motion every Thursday on Madison's 1310 WIBA from 8:05-8:35am.