Ask Larry: Can I Collect SS After My Partner of 30 Years Passes?
Creative Commons photo courtesy of Flickr user 401(K) 2012
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 your questions dry up 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.
Carol Efaw: I had someone come to my home saying he was from Social Security and requested I do a one-hour interview. He said I was selected at random, but that it was voluntary. I declined to be interviewed. I never heard of this and was concerned it is a scam. Do you know anything about this?
Larry: Nothing. It is surely a scam.
John Bingham: When disabled folks marry other disabled folks, why is there no mechanism for seamless transition to the new Social Security Administration support? My son's benefits have been terminated, and it may take six months for his new benefits to be resolved. What is he supposed to do, during this time, to get by?
Larry: This is terrible service. I don't know the answer, but it supports my view that the entire system is dysfunctional due to its insane complexity. To give him his due, the maestro of Making Sen$e, Paul Solman, takes a somewhat more sympathetic view of the system. We argued about it here and here.
Sherry Duncan: I am 64 and working full time. I'm not ready to retire, and going part time would require buying my own health insurance. Is it possible to buy Medicare insurance plus get a supplement but defer drawing Social Security? The income I can make part-time is more than the allowed amount.
Larry: Yes, you can enroll at 65 in Medicare with no impact whatsoever on your Social Security benefit options. As you know if you've read previous posts of mine, you may do much better by delaying until 70 taking your Social Security benefit. That's if you are single and were never married. If you are married or divorced, after having been married at least 10 years, or a widow or widower, what's optimal is much more complicated. If you read my prior postings on this site, you'll get a good sense of the available options. Also, if you are in that boat, my company's software, which costs $40, will provide guidance.
Maggie: My husband is 62. His company is trying to eliminate all older employees and have offered an early out, giving employees a retirement incentive of $15,000 plus maybe a calculation of the highest five years of salary with regard to pension. I know he will make just over $1,000 per month from them since he has worked there 22 years. He says he heard that if you have paid enough into Social Security, you can draw a check and remain working. I am trying to find out all I can about Social Security but there are about 2,000 rules and regulations and my head hurts from reading. Can you help?
Larry: Your husband has this mostly wrong, if I understand you (and him) correctly. The earnings test is independent of how much you contributed to Social Security. Before the year you reach full retirement age, which in his case is 66, the earnings test is 50 cents on every dollar earned above the exempt amount. For 2013, this exempt amount is $15,120. Once you reach Jan. 1 of the year in which you will reach full retirement age, you can earn up to a higher exempt amount: $40,080. After that amount, you lose 33 cents in benefits for every $3 you earn, but only through the month in which you reach full retirement age. For months after you reach full retirement age, there is no earnings test. But -- and this is important but widely misunderstood -- after your husband reaches 66, he will get back, in higher payments, the money by which his benefits were reduced due to earnings.
EIleen Weglicki My husband receives a state teacher's pension and I am eligible for Social Security under my own work record. If he should die, would I still be able to receive my own Social Security benefit even though I receive a widow's pension from his state retirement?
Larry: Yes, since your pension will come not from your own uncovered employment, but from your husband's, the Government Pension Offset provision will not apply to you. Nor will your survivor's benefit be affected by the Windfall Elimination Provision, though it will reduce your husband's retirement benefit and your spousal benefit.
Andrea Swann: My domestic partner died after we were together for 30 years and had two children together. Can I collect his Social Security as a widow?
Larry: Unless you were legally married, the answer is no.
Margie: I am 54 and on Social Security Disability. I've been married 11 years and about to go through a divorce. My about-to-be ex is 57. Will I be able to draw from his Social Security after the divorce since his income was higher than mine? And if so, what percentage?
Larry: You will be able to collect a spousal benefit based on your husband's earnings record. And you will be able to collect a survivor benefit based on his earnings record should he die.
Patricia Gogel: The amount of $115.40 is automatically deducted from my Social Security check each month for Medicare. I have original Medicare, Parts A and B, am 66 and working (again) after many stock market losses in the early and mid-2000's. My understanding is that the fees for Medicare are $99.90 monthly. Why am I paying more?
Larry: The premium for Medicare Part B is calculated on a progressive basis if your income is high enough. To quote the Social Security Administration: "In 2012, only beneficiaries with income greater than $85,000 and married couples with income greater than $170,000 will pay a monthly premium equal to 35, 50, 65 or 80 percent of the total cost, depending on the income they reported on their taxes."
Mirna Vega: My daughter is a widow with one child, but does not qualify for Social Security benefits because her husband was only 25 when he died and didn't have enough credits. Is there any other benefit she might qualify for?
Larry: If she was married for nine months she would qualify for a survivor benefit. And she could receive a mother's benefit while her child is under age 16. Her child could receive a child benefit until age 18 or until age 20 if the child is still in high school or regardless of age if the child is disabled and became disabled before age 22.
Natalie Dorsett: I've paid into Social Security for 24 years (private sector and education in another state), but now work for a Texas school district that does not pay into Social Security. I will meet the rule of 80 in May 2015 to be eligible for retirement, but will only be 56. I have no plans of actually drawing on my school retirement until I reach 59 1/2, but will need to work somewhere. I've been told that if I've paid into Social Security for 30 years that my benefit would not be reduced. Is this true?
Larry: Yes, if you have 30 years of substantial earnings that were covered by Social Security, the Windfall Elimination Provision won't apply.
This entry is cross-posted on the Rundown -- NewsHour's blog of news and insight.