Gateway Financial Partners

Social Security Part 2 – The Exceptions

In part 1 of this 3-part blog, I outlined how to understand the Social Security benefits you could be eligible for based on your own earnings record.  But it is possible that you could be eligible for more benefits based on your current or former spouse’s earnings record instead.  So, let’s look more closely at some of these situations.

If you are currently married, you are typically eligible for the greater of your own benefit or half of your spouse’s benefit.  Like the worker’s benefit, the spouse’s benefit is reduced if it is taken prior to normal retirement age (NRA), but unlike the worker’s benefit, the spouse’s benefit will not continue to increase beyond the NRA.  If you elect to take half of your spouse’s benefit and then that spouse dies before you, then you would be bumped up to 100% of their benefit rather than half (of course, no more benefits are paid to your now-deceased spouse).

Next, let’s look at the scenario where your spouse passes away before either of you start taking any benefits.  Widows and widowers are allowed to start taking retirement benefits as early as age 60, rather than 62; however, the reduction for starting early would still apply.  But there are some unique strategies available to widows/widowers to maximize their benefits.  One option is to start the spousal benefit at age 60 and then switch to taking benefits on their own earnings record at NRA.  Another option is the converse – start taking benefits on their own earnings record at age 62 and then switch to taking the spousal benefit at NRA.  These strategies may allow widows/widowers to get the best of both worlds – starting the benefits early while still allowing the long-term benefits to build up as much as possible.

It is also possible to collect benefits based on the earnings record of an ex-spouse.  It requires that you were married for at least 10 years, you have been divorced for at least 2 years, and that you are currently unmarried.  Note that it is possible to have multiple ex-spouses who meet this criteria!  Divorced spouses are allowed to collect up to half of the eligible benefits of their ex-spouse, assuming that is more than they are eligible for based on their own earnings record.

You can see how this gets complicated quickly (just like Prince Harry)!  If any of these more complex situations apply to you, I recommend talking with a financial advisor or Social Security professional who can walk you through your options.  Lastly, in the third and final part of this series, I address what happens when the Social Security trust fund goes insolvent (spoiler alert: it’s not actually the end of the world!).

The tax and retirement planning information contained herein is general in nature and should not be considered legal or tax advice.

This information is provided for general educational purposes only and you should bear in mind that laws of a particular state and your particular situation may affect this information. You should consult your attorney or tax advisor regarding your specific legal or tax situation.


About the Author

Neil Manning, CFP®, AIF®

LPL Financial Advisor
I am a reformed actuary turned financial advisor, helping my clients with everything from investments to retirement projections to LTC insurance since 2014.  Unlike most normal people, I love numbers and finance – I’m currently reading a book about game theory which my wife and two teenage daughters think is unbelievably boring (they are wrong).  For more details about my background, check out my website below.
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