While attending my brother in law, David’s Celebration of Life this past weekend in Sarasota, I had the opportunity to visit with both his current wife (Kathy) and his ex (Julie) whom they share 2 children with. Being somewhat inquisitive and wanting to make small talk, I asked both ladies separately about their plans for claiming Social Security benefits. Here are their responses;
Current Wife (Kathy 71)
This was easy since she claimed upon her own record back at age 62. Her own benefits were greater than her spousal benefits (50% of workers PIA – Check at Full Retirement Age). Now that he has died she will switch to survivorship benefits, since they were greater than hers.
NOTE! Since she claimed at 62 she was subject to a 25% reduction in benefits since she had claimed benefits early. That penalty / reduction will now go away and she will receive 100% of what David had been receiving at the time of death.
Ex Wife (Julie 67)
I asked Julie how many years they were married, and her reply was 13 and she had remarried Bob 2 years ago. I asked if she was aware that she could claim survivorship benefits based upon David’s life? She said NO, and also didn’t want to take away any benefits that Kathy would receive. I assured her that Kathy would not be affected one way or another as to what she did. She also informed me that she had claimed benefits back in January based her own check at FRA (66 & 6 mos.) since they were greater than David’s.
Recommendation:
Step 1: Since Julie claimed 10 months ago, she should WITHDRAW her application for benefits and payback everything she’s received over the past 9 months.
Step 2: Once accepted she should claim survivorship benefits based upon David’s life and request retroactive benefits for 6 months (maximum retroactive time frame).
Step 3: When she turns 70 switch back to her own benefits and pick up an additional 28% (8% per year for 3 ½ years) in benefits for the rest of her life.
Synopsis:
I don’t know If Julie will actually go through these 3 steps, but I did tell her that the additional benefits over her lifetime would be considerable and that she could use those additional funds to assist her daughter (Single mom) and her twin daughters.
Had Julie remarried prior to age 60 she would not have been able to take advantage of claiming survivorship benefits!
I guess the old saying is “You don’t know, what you don’t know” is extremely relevant especially when it comes to claiming Social Security benefits. Remember The Carpenter’s Rule – Measure 3 times – Saw Once…………
Always here for you,
David P. Zander
CFP Emeritus Board ™
dzander@back9pro.com
260-615-0078
