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Ladies – Don’t be Left out of the Social Security Conversation

We know that statistically women outlive men. By age 85, there are approximately five women alive for every three men alive. By age 95, the ratio of women to men doubles, as there are approximately 10 women alive for every three men alive (Source: 2010 U.S. Census Bureau). As a woman, it’s particularly important to understand the impact of your husband’s benefit decisions on how much you may get as a survivor. Are you and your husband coordinating individual benefit elections to make sure you’re not leaving money on the table, or worse, risking running out of money before you run out of life?

First, let’s get an understanding of the three types of Social Security Retirement benefits that you could receive:

  1. Benefits off of your own history. This assumes that your own record is higher than the spousal benefit described next.
  2. A Spousal Benefit, which is based off of your husband’s history. If you begin taking this at age 66, this benefit is 50% of your husband’s Primary Insurance Amount. The Primary Insurance Amount is a fancy term for how much your husband is eligible to receive at Full Retirement Age (which is 66 for anyone born between 1945 and 1954).
  3. Survivor Benefits, Should your spouse pass away before you and your husband’s benefit was higher than your own. As a widow, you essentially “step into the shoes” of your deceased spouse and begin collecting his benefit in place of any benefit you got while your husband was alive. This assumes that your husband’s benefit was higher than your own benefit. If instead your own benefit was larger than your husband’s, upon his passing, you would continue to receive your own benefit and your husband’s benefit would disappear.

If your husband starts collecting benefits early (any time before full retirement age), his benefit is reduced and that’s all you would be entitled to as a survivor. On the other hand, if your husband delays receipt of benefits until age 70, he earns delayed retirement credits and he locks in a benefit that is 32% higher than the amount he receives at full retirement age (age 66) and 76% higher than the benefit he would have received had he started taking benefits at age 62 (Source: Social Security Administration). This increase in benefit passes on to you as the wife when/if you collect survivor benefits, thus increasing the income you’ll receive in retirement.

For more information on quantifying the impact of your husband’s Social Security claiming decision on you as a survivor, click here.

 

Important Disclosure Information

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request. This article is not a substitute for personalized advice from RegentAtlantic. This information is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

The information in this article is based on RegentAtlantic’s current understanding of Social Security legislation. Congress may change the legislation at any time.

Important disclosure information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.

This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.

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