Social Security Spousal & Survivor Benefits: The Rules That Could Add Thousands to Your Retirement

TPIR Ep 131 Full Show.mp3: Audio automatically transcribed by Sonix

TPIR Ep 131 Full Show.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
So, Josh, I got a question for you. Um, if one of us claimed Social Security on the other one's work record, would the other person's benefit go down? Well, I would assume so, because if I'm getting some of your benefit, surely that means you're getting less. Right. Well, that's what you might think. And that's actually what millions of Americans think, as a matter of fact. But it's completely wrong.

Speaker 2:
Oh, really?

Speaker 1:
Yes. I pulled one over on you. And it's just one of the biggest misconceptions about Social Security. Actually, today we're going to actually kind of break it down for people talk about spousal benefits and how that actually works. Survivor benefits, which are kind of similar, but not really. We'll talk about divorced spouses, how all of these rules literally could mean tens of thousands of dollars difference, maybe even more in retirement. Well, apparently I've got some learning to do and you've got some explaining to do.

Speaker 3:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the LGBTQ plus community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom, so you and your loved ones can have the retirement you've always dreamed of, a retirement you can take pride in. No matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure.

Speaker 1:
Well, hello there and welcome to another edition of Take Pride in Retirement. Matt McClure here with your host, your advisor, your friend, your pal and your confidant.

Speaker 3:
And I am Josh retinol, the attache to the advisor, aka co-host, aka Matt's husband Ben.

Speaker 2:
Ben.

Speaker 1:
Thank you so much and welcome back. By the way, you were under the weather last week. Yes. You know, leave.

Speaker 3:
It up to me to get sick. Once we flew in a plane, you did not get sick.

Speaker 1:
So I did not. And knock wood. Or as the Brits would say, touch wood. Um, all the like things. Throw. I'm throwing salt over my shoulder, if that's a thing. I'm not walking under any, uh, any ladders and not letting black cats cross in front of me. Uh, I have not gotten sick and and hopefully it will remain that way. But glad to have you back on the show. It was weird going solo last week, uh, with everything that was going on. But welcome to the show. If this is your first time joining us, really do appreciate you being here. We would appreciate it as well. If you would like and subscribe.

Speaker 2:
Subscribe.

Speaker 1:
I think I've determined that the low one is my favorite of the two.

Speaker 3:
It's easier. And once I've been sick too, so I don't have to go.

Speaker 1:
It sounds super rich today. Like it's.

Speaker 3:
Thank you. Thank you so.

Speaker 1:
Much. It's deep. Yeah. Thank you, thank you Elvis. Um, also also follow us wherever you get your podcasts. We're on the social medias, the socials, uh, as as the kids say these days as well. So yeah, just follow us everywhere. Subscribe, leave us great reviews and ratings and all that stuff. It really does help the algorithm on YouTube as well. Leave a comment down below, and we'll be glad to get back to you on that or just share your thoughts or, you know, whatever, like, like, I literally just want you to engage with us and, um, you know, help spread the word and, and grow this community that we got going here. Um, now first off, uh, as we said at the very top, social security is one of the biggest kind of misunderstandings that people have about retirement, different aspects of it, but it's also one of the biggest financial decisions that you can make. And I am, of course, if you can look, if you are watching on YouTube, you see there below my, uh, my pretty little face, um, RSA next to my name, that means registered social security analyst. And so that means that I have taken the time to get extra education on Social Security, learn the ins and outs of it, and be able to educate folks about it, and then even do like specific analysis based on your own earnings record.

Speaker 1:
Now today, though, obviously I can't do that for you because, you know, it's a it's a show and I'm not meeting with you in person. But today's goal is to talk about like, who qualifies for these different types of benefits, especially spousal benefits and survivor benefits and how to avoid costly mistakes. If you think that you are one to potentially make these costly mistakes. Well said and done, listen to this episode. But then I'm going to go to take pride in retirement.com. It's take pride in retirement.com and you can fill out the form there to request, um, an email back or a call back, whatever the case might be. Or you can just go ahead and schedule a free consultation either in person. If you happen to be in Metro Atlanta or via phone even, or Zoom or Google Meet or teams or carrier pigeon like. We can communicate, however, but just do that. Take pride in retirement.com is the website. All right, let's get into it now. I've done enough yapping here.

Speaker 3:
Yeah. So let's just start with the basics. What exactly is a spousal benefit.

Speaker 1:
Well, a spousal benefit. So it's kind of it can be sort of, I guess a little bit misleading. And two of the things that kind of get confused with each other a lot are spousal versus survivor benefits. And so I'm glad that we're doing this today because of that. If nothing else, but married couples, um, can actually sort of share benefits a little bit. Now that is meaning that a married spouse may qualify for up to 50% of their spouse's full retirement age benefit. Now, that is only the case if the benefit that you qualify for on your own work record is less than that amount, right? Is less than 50% of what your spouse's full retirement age benefit is going to be? It's not 50% of what your spouse is currently receiving. So like if your spouse has already started their Social Security benefits, they're like, you know, 68, let's say, and you're like, you know, reaching full retirement age and you want to start claiming Social Security and you're like, oh, I'm going to get 50% of what my spouse is, is making. And he's, you know, maybe been on Social Security for three years or something and has gotten those cost of living adjustments. So I'm getting a boost. No, it's the full retirement age amount.

Speaker 1:
And so like, if your spouse is full retirement age is 67, for example, that is the amount that's going to be used for the calculation and claiming before full retirement age. Just like if you're claiming your own benefit, it can reduce the benefit for a spousal benefit as well. And your spouse. Importantly, and to finally answer that question that you, uh, put to me in the very beginning or that I put to you, I guess in the very beginning, um, was know your spouse does not lose any money at all. Spouse does not lose any money. So if I collected a spousal benefit on your work record, you still receive your full benefit. Exactly, exactly. And so, you know, I mean, Social Security isn't like for, for you and your spouse. It isn't like a pie that you each get a slice of, you know, that same pie, you each kind of have your own pie. And one pie may be larger than the other pie, but you're not splitting a single pie. In other words, it's one of them, a chocolate pie. I've been asking for one for weeks. Oh my gosh. Well, let's see. The complication is you want a keto chocolate pie and those are hard to come by.

Speaker 2:
So you gotta cut that sugar, cut them carbs.

Speaker 1:
I know right, we're going to turn into a health podcast here before long. Mhm. Um, but yeah, so, but which could also be a financial thing because when you're talking about like health and wellness and everything, you talk about longevity, and then you can talk about longevity, risk and all those things. Um, and that also goes into Social Security and you're claiming age and, and all of that kind of stuff. But on the topic of Social Security, it is a separate benefit for each of you that is created by law. So spousal benefits work in a particular way here. And I want to show this, uh, for those of you who are watching on the old YouTube machine, again, it's up to 50% of the spouses. Pia what is P? I mean, it means primary insurance amount. That is the amount that you are due at your full retirement age. For most people right now, that is age 67. Anybody born after 1960, it's age 67, right? So the maximum that benefit maxes out at that full retirement age. Like you can't go above and beyond that. You still get the cost of living adjustments every year and that kind of thing. But you can't get more than what you would get at full retirement age to begin with. It maxes out. Then if you are married, you're eligible after one year of marriage. So don't think, oh, I'm going to marry my spouse on a Thursday and then on a Friday, I'm going to start claiming this spousal benefit. No, that's not a thing.

Speaker 1:
If you're divorced, then you're eligible after being having been married for ten years. Right. And then you're independently entitled after two years of being divorced, right? So you have to have been married for ten years, but you're independently entitled two years later. And it depends on, again, your income level versus that of a spouse. Um, so and there's an example here. This is just, uh, you know, picking some numbers out that are, uh, because this is part of an RSA presentation and several of the slides of the presentation go through different, you know, numbers in this scenario. But let's say if this was your spouse's primary amount. A little over $3,000. A little over $3,200. Actually, you would max out at full retirement age at 50% of a little over $1,600, right? So that's the maximum spousal benefit. Anything, any time before that, that you get, uh, you know, an itch to claim your benefit, it's going to be reduced by a certain amount. Just like if you were to claim your own benefit early, it gets reduced. So there you go, a little, little visual aid this time around. I like that. And listen, listeners, tune in to our YouTube and subscribe if you'd like to see these visuals and not just hear them through the dulcet, beautiful tones of Matt McClure's voice. Yeah, I'm thinking of starting my own Asmr where I just read like charts and stuff. That'd be nice. Yeah. All right. So I will definitely put people to sleep, I'll tell you that.

Speaker 4:
Be like, yes, RSA.

Speaker 1:
All right, so here's the thing that confuses me. And I think it confuses a lot of people. So spousal benefits and survivor benefits kind of sound like the same thing. They kind of do. And that's the thing. Like I had, um, you know, actually in a couple of the seminars that I have done on Social security at like local libraries and things, I've had people say, you know, oh, wait, there's a difference between those two. Like people are kind of surprised to learn that. And survivor benefits are often much more valuable. Um, but they're kind of a lot sadder as well when we talk about survivor benefits. And there's that word right? Survivor. Um, that means one of the spouses has passed away and the survivor will keep the higher of the two benefits, right? So, um, I actually have, if you're watching on YouTube, a little bit of a visual aid for that as well. So if you are a survivor, you are, you had to have been married for nine months or more If you are divorced. You had to have been married ten or more years and not remarried before the age of 60 to qualify for a survivor benefit. And there is a there is something called a widows limit where you're kind of maxed out at 82.5% of the primary insurance amount. So the full benefit amount of your spouse, they don't get into the weeds too much on that. But if you are married for nine months or more, then you do qualify for a survivor benefit. That's one of those things. It's not like, again, you're going to get married on a Thursday, and then on a Friday, your spouse gets hit by a bus.

Speaker 1:
No, that would not work. Uncle Sam would frown on that. But again, it kind of maxes out at the survivor benefit amount of 100% at age 67, at full retirement age, it doesn't go up. You don't get don't get raises. Beyond that. And aside from the yearly cost of living adjustment, but again, you can qualify at age 60 so you can qualify earlier than even the early regular benefit for Social Security. So all the way back to age 60 instead of 62, but you get that reduced benefit just again, like if you were doing your own benefit for Social Security. And so delaying benefits, like if the higher earning spouse. I generally will say, wait to claim your social security because then that is going to make your, uh, if you can wait, you know, sometimes people can't, they need the money when they need the money. But if you can wait, wait, because that makes your benefit check go up and that can, can benefit the spouse. That's why couples should really think about the other when claiming Social Security and really think beyond just the here and now, when at all possible. Yeah. So delaying Social Security is not always about getting a bigger check while you're alive. It's also about protecting your spouse later on. Oh yeah. That's that's really, I think one of the biggest things I mean, you've heard me tell this story before, but when my, um, my dad passed away, this is one of those things that we learned about like in real time a few years back was that, you know, my dad passed away, my mom got a notification from the Social Security Administration that her Social Security is going away.

Speaker 1:
It's disappearing because she was the lower earner of the two. Bad news on the surface when you're like, wait, my social security is going away because my spouse died. Uh, okay. Hold on. You still get to keep now. Like, it's basically like you inherit that higher check from that higher earning spouse. So, you know, yeah, you lose the lower check of the two, but you get to keep the, the higher of the two. And one spouse's decision today really does affect the other spouse decades from now. You know, you're absolutely right. And this information too is really super important for LGBTQ plus couples who, you know, may have married later in life who may have married, you know, after marriage equality became the law of the land. Social security now does recognize same sex spouses just like opposite sex spouses claiming strategies are still extremely important because of that. And I think even more important than before for LGBTQ plus folks, because of that, because of marriage equality, because of, you know, the benefits that we can enjoy. And, you know, we complain about Uncle Sam, we complain about, you know, having to pay taxes and all this kind of stuff a lot. But there are good things that come from Uncle Sam as well. This is one of them. So let's maximize and optimize our decision making. So again, take pride in retirement.com. If you want to get a free consultation. I'll be happy to do that for you. Run an analysis of your individual situation.

Speaker 5:
Yeah. And I always say Matt is the advisor that cares. He's not going to steer you in the wrong direction. If he can help you, he's going to help you. And if he can't, he'll point you towards someone who can.

Speaker 1:
Exactly 1,000,000%.

Speaker 5:
All right, so here's another question for you. What if someone is divorced?

Speaker 1:
Yeah. If you're divorced, yeah. You still do qualify for those benefits. There are those, uh, sort of caveats and restrictions there, though. Again, you have to have been, as I was saying a little bit before, you have to be married at least ten years and currently unmarried. So that's a general rule anyway, at least not married again before age 60. And then the if you're divorced, the ex doesn't lose their benefits. They don't even have to know about it. Like, right. I mean, you just, you kind of just say, okay, Uncle Sam, this is my ex and they made a lot of money. And so I, we were married for ten years. I want to, you know, get the benefit that I am due, but you have to know about it, right? Uncle Sam's not going to just say, hey, wait a minute. Didn't you used to be married before and your ex X is like a millionaire or something and made all this money. Um, Uncle Sam is not going to just go and find that information. You have to tell him about it. And so that is something to always keep in mind. And, and one of the things that really makes it important to work with a pro on these issues, but the X doesn't lose benefits and they don't even know that is a, that's a beautiful thing. You don't have to feel like you have to take part in awkward conversations or anything.

Speaker 5:
Yeah. So theoretically, someone's ex could be collecting on their work record and they'd never know.

Speaker 1:
Yeah. I mean, 100% like they would like not even be, uh, they would be none the wiser. In other words. And, you know, people really shouldn't let their own, you know, obviously the show is called Take Pride in Retirement. You should be proud of yourself. You should have pride in yourself and who you are and, and your relationship and your life and all of those things. But you shouldn't let your own sort of personal pride, like pride in the bad way. Like you shouldn't let that kind of pride stop you from claiming the benefits that you've earned, and you shouldn't let any sort of bad history or bad blood with an ex, uh, delay that or keep you from getting what you do. All right, let's do some myth busting. I always like this portion. Me, too. Here we go. If I claim on your record, you lose money. That one, as we have established, is false. I need a buzzer sound effect, but I don't have it ready here. Actually, uh, at the moment I say hold on. Do I have it? Do I have it? Do I have it? Hold on, hold on. Everybody's holding.

Speaker 1:
And the thing is, no, I do not. But I do have this. We have booze. There's a shade button somewhere. I know. Yeah, we should get that somewhere. Okay. Anyway, sorry, I didn't have my buzzer, but I had my boo. All right, so if if I claim on your record, you lose money that, uh, for married couples, that is false. Okay. Number two, the government automatically gives me the highest benefit. No, that one is absolutely false as well. Like I was saying, Uncle Sam is not going to just go out and like through his, um, you know, grace and wonderfulness find out things about you. That's not the case. Like you're going to have to volunteer that information and provide proof of it. So no, you have to understand your options. Again, folks, take pride in retirement.com. I cannot say it enough. Survivor benefits are just another version of spousal benefits. Yes, Morty. No they are. They're completely different things. Um, and yeah, I mean, and again, we can always get those confused because they do sound similar. Survivor, though, means a death has occurred. Spousal means the spouse is still alive. Huh huh.

Speaker 6:
If I've been divorced, I'm not eligible a Divorce?

Speaker 1:
Uh, not necessarily. There are rules, but most of the time, if you've been married at least ten years and you're not remarried, yeah, you're you're eligible for that, uh, spousal benefit or the survivor benefit as well. Yeah.

Speaker 6:
Final myth. Social security is simple.

Speaker 1:
I mean, if only that were true, right? Uh, that's, uh, that's a good one. Uh, as, as they say, a knee slapper. Um, social security, there are a lot of ins and outs. I think a lot of people, especially when you're younger, you sort of think, oh, well, when I reach whatever age, I'm going to claim Social Security. And there are really no major decisions that need to be made around it. There are a lot of decisions to be made around it. And so it's, it's great because I love the things that I do, the line of work that I am in, uh, because of that very fact, because of, you know, the thing that I get to explain, I get to help people make the optimal decision for them. I don't love that the system is complicated or anything like that, but I love being able to help people make sense of it. In other words. And so yeah, I wish it were simple, but it can be pretty complicated, especially depending on your own individual situation.

Speaker 6:
Well, you know what, thank you for explaining all this today, Matt. I have learned several things that I did not know.

Speaker 1:
Well, you know, I mean that really. And you're welcome, by the way. And that's why conversations like this matter, you know, not only here with us on a podcast, but in person. And so these small claiming decisions can really have big effects for the long term and mean tens of thousands, if not hundreds of thousands of dollars difference, a claiming decision. And the timing of that can really make a huge difference in, in the long run, uh, to the tune of hundreds of thousands potentially. And so you only get one opportunity to make a lot of these decisions. So if you're married, if you're divorced, if you are widowed, you're, you're simply maybe wondering when you should claim Social Security. Don't just guess at it. Don't throw a dart at the dart board and see where it lands. Right. A thoughtful claiming strategy, something that you actually plan out with the help of someone who is certified in this area. And I am, um, that can really be such a difference maker for you in your retirement and can give you that retirement that we always talk about, one that you can take pride in, right? And so as a registered social security analyst, I really do help people understand the rules, understand claiming strategies, build a strategy just for them. I'll give you a report. It's called an RSA roadmap, and it shows you when the optimal time is for you and or you and your spouse or whomever to be able to claim Social Security based on your own earnings record, their earnings record as well, and your life expectancy and all those types of things. Take pride in retirement.com. Is the website 85524692178552469211 is the number. Schedule a consultation. It's absolutely free. No cost, no obligation. All right. I'd love to see you in person or via the old interwebs here. All right. That's gonna do it for this time around here on the show. But, Mr. Attache, thank you.

Speaker 6:
Pleasure, Mr. McClure.

Speaker 1:
Pleasure doing business with you, Mr. Noble. And it's a pleasure to have you on the show. On the other end, either listening or watching. Really do appreciate it. Without you, we don't have a show. So thank you so much for your support. Continued support as well. Spread the word about take pride in retirement. Until next time, take pride in yourselves and take care of each other. We'll see you then.

Speaker 6:
Thanks for listening. To Take Pride in Retirement, members of the LGBTQ plus community deserve to work with a fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call (855) 246-9211 or go online to take pride in retirement.com investment advisory services offered through Brookstone Capital Management LLC, BCM, a registered investment advisor, BCM and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Matt McClure, an active wealth management are not affiliated with or endorsed by the Social Security Administration or any other government agency.

Speaker 1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy. Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure, the ADV two A item four for additional information.

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