In this week’s column, Phil Moeller, the author of Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs and co-author of the updated edition of How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security, answers questions related to divorce and deferring Social Security.

Got a question of your own about Medicare or Social Security? Send it to askphil@considerable.com.

Question

Dear Phil:

I read the book you co-authored, Get What’s Yours, regarding social security benefits. Great advice! I lent it to a friend and don’t recall whether you covered this question in it.

To claim part of my ex-husband’s full retirement age [FRA] benefit when I reach 66, does my FRA benefit need to be less than his?

Here’s my situation: I will turn 66 at the end of December and am single. I’ve been divorced over 10 years and my ex-husband is the same age (his birthday is six days before mine). I would like to delay claiming my Social Security benefit until 70 if possible, and asked my local Social Security office whether I could claim part of his FRA benefit in a few months when we will both be 66.

They looked up what the monthly benefit will be for each of us at FRA, and since mine will be somewhat higher than his, they said I can’t claim part of his. 

Is that correct? Thank you in advance for your help!

Betsy 

Answer

Dear Betsy:

You were correctly informed, but it’s possible the office left out a step in explaining its conclusion.

When you file for an ex-spousal benefit, this will automatically trigger filing for your own retirement benefit, and you will receive the larger of the two.

When you file for an ex-spousal benefit, this will automatically trigger filing for your own retirement benefit, and you will receive the larger of the two. If your own retirement benefit is larger than your ex-spousal benefit, you would receive nothing from an ex-spousal benefit. 

This also would mean, of course, that you could not wait until 70 to file for your own benefit. So, if that’s your most important consideration, then you should not do anything when you reach your FRA.

Follow-up

Thank you for getting back to me on that. Next, I will need to figure out whether to start claiming Social Security at 66 or instead pull money out of my 403(b) on a monthly basis to live on until I turn 70 (supplemented by some other income). I suppose everyone’s situation is different, but if you have any general advice about that, I’d welcome it.

Thanks again! 

Betsy

Answer

Dear Betsy:

As you say, everyone’s situation is different. The only general advice I’d give is to note that your Social Security benefit will rise by 8% a year — plus any cost of living increases — each year you defer claiming benefits from age 66 to 70. This higher benefit would last the rest of your life, which might be a long time.

I would compare this with the projected performance of your 403(b) (not always easy to do, I realize). The tax hit on 403(b) withdrawals would also need to be factored in. By the way, many people do not realize that Social Security benefits are never taxed at more than 85% of ordinary income, regardless of how wealthy a person may be.

As you can tell, I favor deferring Social Security if you can. While no one likes to see their retirement account balances diminished, Social Security benefits are guaranteed by the government, and I think increasing them is usually a good thing.

Good luck!

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