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Ask Larry: ‘Can a Lifelong Housewife Get Social Security?’

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Larry Kotlikoff’s Social Security original 34 “secrets”, his additional secrets, his Social Security “mistakes” and his Social Security gotchas have prompted so many of you to write in that we now feature “Ask Larry” every Monday. We are determined to continue it until the queries stop or we run through the particular problems of all 78 million Baby Boomers, whichever comes first. Kotlikoff’s state-of-the-art retirement software is available here, for free, in its “basic” version

cashlamb: My Social Security benefits are $1000 a month. I haven’t received a check for 44 months (because I changed my address and my bank account closed). I called the Social Security Administration and they resumed my direct deposit after 10 days. I was expecting $44,000, but received a lump sum of only $26,000. Is there a 30% interest charge? All I asked the Social Security Administration to do was restart my direct deposit.

Larry Kotlikoff: Your benefits shouldn’t be penalized if the Social Security Administration lost track of where to send your checks. You should go into the local office and sort this out.

cashlamb: I was married for 22 years and have been divorced for one year. My ex-wife died at age 42 (1990); I’m 69. She worked about 5 years. Can I get survivor benefits?

Larry Kotlikoff: Assuming there is only one person writing to me under your name, “cashlamb,” (see the first question, above, from the same email account), your situation certainly has its share of complications, though I can’t deduce, from your two messages, how many wives you’ve had. One who died? Or two?

(And, now that I reflect on your first email, it contains its own ambiguities. You applied for Social Security at age 65 four years ago but closed a bank account, never got the checks, and it took five years to fix the problem. In short, you once were lost but now are found. However, you received a lower lump sum in back benefits than you think you deserve. Now you want to know if you can collect a survivor’s benefit. Wow.)

Assuming the deceased wife is the person “who worked about five years,” however — yes, you may be able to collect survivor benefits. But here’s the rub: your own benefit may exceed what you can get in survivor benefits unless you suspend your retirement benefit, which it sounds like you can only do for one year.

Kathy: I have always been a housewife. Can I get any social security?

Larry Kotlikoff: You can receive spousal benefits based on your husband’s earnings record. And if you are divorced, but were married for 10 years, this is also true. If you are widowed you can receive spousal benefits based on your husband’s earnings record if you were married for at least 7 months at the time he died. Or if you were married for at least 10 years and then got divorced before he passed away.

Mike Rosenberger: My birthday is March 30. I am 63. If I retire on April 1, when can I expect my first check?

Larry Kotlikoff: Your first check should arrive in April if you apply in March. You don’t have to wait until your birthday to apply. But consider waiting until you are 70, when your benefits will be much higher. If you are married, divorced or widowed there are other options to consider. Check out my answers in previous editions of “Ask Larry,” which appear on this site every Monday. Just click here (Scroll down and click on my various “Ask Larry” columns, which began on July 30.)

Jennifer: I just turned 63 and my husband just turned 66. We have not entered the Social Security system yet. I am the wage earner and have made substantially more income than my husband over the years and planned on waiting until I was 70 to take Social Security since I am still working full time and plan to continue to do so until then. Besides which, my benefits would be much higher by doing so. My husband also plans on waiting until 70 even though the benefits aren’t as big a difference.

What is the best way for us to use the system to our benefit? Can I take spousal benefits now that he is 66 and not impact my own benefit and can he still delay his benefits until 70 or does that mean he has to take his full retirement benefits now? Does this also mean I could potentially collect spousal benefits for 7 years, assuming he does have to take his benefits now? Since I am the higher wage earner, would they instead pay me retirement benefits and not spousal benefits? Lastly, if I can not receive spousal benefits, what is the best plan of action? Are there any other alternatives besides both of us waiting until 70 to take our benefits?

Larry Kotlikoff: Your husband can file for his retirement benefit and suspend its collection, which would entitle you to a spousal benefit. The problem is, Social Security will force you to take your retirement benefit early as well and you would, from what you describe, end up getting no spousal benefit.

If you wait until you reach full retirement age (66 for you), however, you can apply just for your spousal benefits, assuming your husband files and suspends. Under this scenario, you both can opt to wait until age 70 to collect your maximum retirement benefits. This is the option I most often recommend. It’s what I told Paul Solman to do when we became friends years ago. He followed my advice and was so grateful, he offered to take me to dinner anywhere in the world. We settled for Boston. Maybe you can take me to dinner here as well.

Another option is for you to apply now for your retirement benefit and have your husband apply just for his spousal benefit. (He can do this without being forced to apply for his retirement benefit because he’s reached full retirement age.) Then, when you reach full retirement age, you can suspend your benefit and start it up again at 70. I call this the Start-Stop-Start strategy. And your husband can take his retirement benefit starting at 70 as well. My company’s $40 program, Maximize My Social Security, can help you see which option, including Start-Stop-Start, will give you the highest lifetime benefits.

D.D.: I have worked steadily for 15 years but got hurt and was disabled. Now I am retired and Social Security Disability was given to me. Does anything change when I turn 62 or even 65 years old?

Larry Kotlikoff: Your disability benefit will become your retirement benefit at full retirement age. If you are married, divorced, or widowed, there are other options for you to consider.

This entry is cross-posted on the Rundown– NewsHour’s blog of news and insight.

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