Episode Description - Social Security Mistakes That Cost You Thousands
What if one decision could give you a 24% inflation‑adjusted raise to your retirement for life? Financial planner Eric Blake reveals the hidden complexities of Social Security that could cost you thousands—or help you maximize your retirement income if you know the rules. From understanding full retirement age to navigating spousal and survivor benefits, Eric breaks down the critical decisions that can make or break your financial security in retirement.
The discussion covers essential Social Security strategies, including when to start claiming benefits, how working affects your payments, and the tax planning opportunities available at age 70. Eric explains the crucial differences between spousal benefits and survivor benefits and why understanding these distinctions matters for your financial future – especially if you’re divorced.
Eric also clarifies the often-misunderstood rules around ex-spousal benefits, including the critical 10-year marriage requirement and how remarriage affects your eligibility to get Social Security benefits based on your ex’s status (… which you can claim without your ex-spouse's knowledge or consent!)
Whether you're approaching retirement, recently divorced, or widowed, understanding these Social Security rules could mean the difference between financial struggle and financial security.
Show Notes
About Eric
Eric Blake is a CERTIFIED FINANCIAL PLANNER® professional and the founder of Blake Wealth Management, specializing in helping women 55+ navigate retirement with clarity and confidence. With more than 25 years of experience, Eric provides strategies to optimize investments, create reliable income, and minimize taxes. Inspired by his mother and grandmother’s financial journeys, Eric has a personal passion for empowering women to take control of their financial future
Connect with Eric
You can connect with Eric on LinkedIn at Eric Blake and on Facebook at Eric Blake. You can follow Eric on Instagram at Eric Blake, on YouTube at The Simply Retirement Podcast and on his podcast The Simply Retirement Podcast. To find out more about Eric’s work visit his website at Blake Wealth Management.
Free Resource
Grab Eric’s Top 6 Social Security Guides and Checklists for Women -
Key Takeaways From This Episode with Eric
- Eric Blake is a Certified Financial Planner with over 25 years of experience, specializing in helping women over 55 navigate retirement planning with a particular expertise in Social Security optimization strategies.
- For those born in 1960 or later, Full Retirement Age (FRA) is 67. Benefits are reduced if claimed before FRA and increase up to 24% if delayed until age 70.
- If you claim benefits before FRA while still working, your benefits may be reduced based on income. Once you reach FRA, you can earn unlimited income without affecting benefits.
- There's no benefit to waiting past age 70 to claim, except for minor tax planning situations involving retroactive benefits (up to 6 months back).
- A lower-earning spouse can receive up to 50% of their spouse's FRA benefit, but only the full 50% if they wait until their own FRA to claim.
- Upon a spouse's death, the surviving spouse receives 100% of what the deceased was receiving (or would have received), and the lower benefit disappears.
- You must be married at least 10 years (exactly) to qualify for ex-spousal or ex-survivor benefits from a former spouse.
- Remarrying eliminates eligibility for ex-spousal benefits. For survivor benefits, you can remarry after age 60 and still claim benefits from a deceased ex-spouse.
- Multiple ex-spouses can each claim benefits based on the same person's record without affecting each other's benefits.
- The Social Security Fairness Act (2024) - eliminated the Windfall Elimination Provision and Government Pension Offset, primarily benefiting women teachers and others with non-Social Security pensions. Retroactive to January 2024.
- Benefits don't automatically switch or increase—you must actively apply for survivor benefits and keep required documents (marriage certificate, divorce decree) to prove eligibility.
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Transcript
Social Security Mistakes That Cost You Thousands
SUMMARY KEYWORDS
social security, spousal benefits, marriage rule
SPEAKERS
Karen Covy, Eric Blake
Karen Covy : 1:40
Hello and welcome to Off the Fence, a podcast where we deconstruct difficult decision making so we can discover what keeps us stuck, and more importantly, how we can get unstuck and start making even tough decisions with confidence. I'm your host, Karen Covy, a former divorce lawyer, mediator, and arbitrator, turned coach, author, and entrepreneur. And now without further ado, let's get on with the show.
With me today, I have the pleasure of speaking with Eric Blake. Eric is a certified financial planner, professional, and the founder of Blake Wealth Management, specializing in helping women over 55 navigate retirement with clarity and confidence. With more than 25 years of experience, Eric provides strategies to optimize investments, optimize social security, create reliable income, and minimize taxes. Inspired by his mother and grandmother's financial journeys, Eric has a personal passion for empowering women to take control of their financial future. He's also the host of the Simply Retirement Podcast. Eric, welcome to the show.
Eric Blake : 2:51
Thank you so much. I'm so excited to be here, and it's an honor to join you.
Karen Covy : 2:55
Oh my goodness, you're not the only one who's excited. I have been, and like as we were talking about before the show started, I don't even know how we're going to cover everything that needs to be covered in this one episode, but we're going to do our best here. And if need be, I'll bring you back again. But you're here, and I really want to talk to you about social security. Because for so many people, Social Security is just like this black cloud of I know I'm entitled to something, but I have no idea how it works. So let's talk about Social Security, retirement benefits. And I think one of the first things that people have questions about is when they should start claiming their benefits, right? Because the retirement age seems to keep changing over time. It used to be 65 period full stop, and now it's all different kinds of things. And it when you start claiming social security benefits determines how much money you get. So can you explain how all of that works?
Eric Blake : 3:59
Sure. Yeah, I'll get this all done real quick here. So I think the biggest thing you want to start with is when you look at your Social Security statement, you want to figure out number one, what is your full retirement age? And then number two, what is my full retirement age benefit? So the full retirement age, as you said, it has changed. So back in 1983, that's when we have the current rules that we have in place where it was increased to age 67. But as many people probably have figured out, it took about 40 years for that to actually happen. So that's where the little bit of the confusion comes in, where it was 66 and then 66 in two months, and 66 in four months, and so on and so forth, based on the year that you were born. But basically, right now it's made relatively simple and just say, okay, if I was born in 1960 or later, my full retirement age is 67. Right? And so when we're talking about people in kind of that retirement planning phase, that many that's gonna apply to most people. Now, once you know, okay, what's my full retirement age? What's my full retirement age benefit? That is gonna be the age at which you can start receiving the full benefit with no reduction. Right? So if you start early, that's always the key thing to know. If you start earlier than your full retirement age, your benefit is gonna get reduced by some percentage. Right? So there's all kinds of different rules of thumb. I think again, it's as complex as Social Security can be, it really needs to be an individualized decision based on your cash flow needs, based on your other resources. That should guide your decision as to when I'm gonna start. Because again, life just sometimes just happens. And so we've got to make decisions on the fly sometimes. So you go into it and say, okay, here's when I think I should start. But if life happens and I have to start sooner, so be it. Or if I have the opportunity to delay, my benefit can actually increase beyond my full retirement age to a maximum benefit at age 70. Now, again, keep in mind this is talking about my personal benefit, my personal retirement benefit. And actually, we'll get into spousal benefits and ex-spousal benefits and all those fun topics as well. But that's kind of the basics of what you want to know.
Karen Covy : 5:57
Okay, so let me ask you a question because let's say I'm a person and I'm approaching that full retirement age. I'm not there. And so my decision is do I start now? Do I start at full retirement? Do I wait until I'm 70? How do I figure out what's going to ultimately put the most dollars in my pocket? Because if I start earlier, I may be getting less money now, but I'll be getting it for longer, assuming I live an average lifespan.
Eric Blake : 6:24
Okay, so that that's always the easy question. So if you can tell me when you're going to pass away, I'll give you the exact answer. That's the easiest way to go about just tell me when you're not when you're gonna pass away, and I'll give you the perfect answer. And but that's obviously that's where the the trick is, right? So we look at things like longevity. What's my history, what's my family history look like? And what are the other variables in my life? And I've just looking at other resources. But you can always say, well, the maximum, the very maximum benefit from again, my own retirement benefit is gonna be age 70. But then you get that question, well, what about how long do I have to live before that pays off? And for most people, that's gonna be if I wait till 70, it's gonna be somewhere in those early 80 years, 81, 82 is gonna be the what we call the break-even point, where the benefits I receive by waiting surpass my lifetime benefits I would have received by starting earlier.
Karen Covy : 7:17
Okay. So let me ask you another question. If I'm still working, because a lot of people I know are they're vibrant, they're able to work, they want to work, or they're in a situation where they have to continue working, right? Whichever bucket they fall in. Um, and so let's say they're still working at age 67. Okay. Um does it make sense for them to start claiming their social security then, or does it get reduced because they're still working?
Eric Blake : 7:50
That's a great question. And I actually did a podcast episode on this. Unfortunately, it's not out yet, but it'll be out in a couple of weeks. But on that exact topic, and where, where is how where do these break-even calculators miss the mark? Right? So it's not just as easy saying, well, if I start here, what's my lifetime benefit? If I start there, what's my lifetime benefit? We need to affect, and that's why it's so individualized based on your specific situation. So working, because as you said, there are so many individuals who continue to work on into their late 60s, early 70s, because what else might they do? Sometimes they don't know what else there might be, you know, what what's my life gonna look like if I'm not working? But that's really where we start looking at saying, okay, that's where that full retirement age really again becomes so critical. We'll just so just for our conversation purposes, we'll assume our full retirement age is 67. If I start receiving social security benefits earlier than that age and I'm working, I'm gonna be subject to something called the earnings test. Right. And that means I can only earn up to a certain amount before my benefit actually could get reduced.
Karen Covy: 8:51
Okay.
Eric Blake : 8:52
But once I've hit full retirement age, that magic age, I can work and can earn as much as I need to or want to with no impact on my social security benefits.
Karen Covy : 9:02
Okay, so let me stop you. I want to make sure that I understand this. So let's say I'm 67 years old, I'm at full, I'm at full retirement age, I'm not at 70, I'm not the later, but I can start claiming social security. And let's say I'm earning $100,000 a year. Is there any reason why I would not want to claim Social Security if I could?
Eric Blake : 9:24
Again, it looks it's one of those things where you have to think about my how do I think emotionally about my finances? So if I were to tell you, okay, if I just delay three more years, you're gonna get a guaranteed 24% increase in my benefit for the rest of my life. Guaranteed. And that income's also actually gonna increase with inflation. Would that make you feel better? Would that help you sleep better at night knowing that? And that's the part that a lot of people don't necessarily think about is saying, okay, if I my full retirement age benefit is 3,000 and I wait three more years, that means that benefit's gonna be something closer to maybe 3,800 guaranteed for the rest of my life.
Karen Covy: 10:07
Okay, let's say I'm and we're gonna change the scenario. Let's say I am 70, right? So that I'm at the the outside, social security is never gonna get better than that, right?
Eric Blake: 10:16
Right, exactly.
Karen Covy: 10:17
So I'm 70 years old. Is there any reason for me not to claim social security if I'm still working? Let's say I'm making a hundred thousand, two hundred thousand dollars a year. Is there any will my social security get reduced? Will I get dinged for that? Does it make sense?
Eric Blake : 10:34
The only reason, so almost there's almost very, very few situations where you wouldn't apply at 70 because again, your benefit, you're there's no benefit to you of waiting at that point. The only reasons, I'll give you just a couple of minor reasons. Hopefully, this doesn't muddy the waters too much, but the only reasons why you might still delay is for tax planning purposes. So just a quick example to say, okay, I turned 70 in July, but I've got a full year of salary coming for that year. Well, if I'm gonna be in a higher tax bracket, that might mean I can actually use a strategy, a very little-known strategy, of saying I'm actually I can wait and receive retroactive benefits of up to six months. So I might say, I'm just I'm gonna wait till January, file for my benefit retroactively to my 70th birthday, so that my benefits don't actually kick in until January, because now I've retired, I'm in a lower tax bracket, I'm in a better circumstance from that standpoint. That's the only very few reasons why that would make sense. But for the most part, if you want you hit 70, for the most for the majority of people, you apply and you move forward from there.
Karen Covy : 11:37
That makes so much sense because for those listening, and tell me if I'm right, you pay income tax on the year you receive the income. So even if it's for retroactive benefits, let's say for benefits in 2025, if you don't get the money in your hand till 2026, it's 2026 income, right?
Eric Blake : 11:56
Exactly. So, like if I'm making 150,000 a year in 2025, I might not want to start that, I don't might not want to add extra income to that because it might push me into a higher tax bracket. This year, we also have the One Big Beautiful Bill Act, which has an additional age 65 plus deduction of 6,000. What if that extra Social Security income pushes me above that threshold? Now I lost $6,000 in deduction and this new deduction that we have available for age 65 plus. So that's really where, again, all these you always talk about. I talk about this retirement income puzzle. You got all these different pieces. You got IRA accounts and 401ks and Social Security and taxes, you got all these different things. How do you start putting those pieces together in a way that makes sense for you? And that's really the key to this is really making sure you look at your situation, figure out what the optimal strategies are for you, or consult with a financial advisor that has experience in this phase of life. Because not all advisors do. So you got to be sure if you're going to ask, ask for advice, you're gonna ask for guidance, make sure you're asking these types of questions. Okay, how do how what's your familiarity with Social Security rules, specifically for diverse divorce circumstances or widow circumstances? How much experience do you have? Do you have somebody, do you have a client I might be able to talk to about their experiences working with you, those types of things?
Karen Covy : 13:14
I really love that. And when you're talking about the context of divorce, what further complicates things, as you know, is that often one spouse was the stay-at-home spouse. And so they don't have the same level of retirement benefit from Social Security due to them, but they may be eligible for a spousal to claim under their spouse and get the spousal benefit. Can you explain what's the spousal benefit in Social Security and how does that work?
Eric Blake : 13:45
So I think that one of the key things is you always got to distinguish that when you hear the word spousal, you got to distinguish between a spousal benefit, which is based on the higher earner's record, and a survivor benefit. So many people get those confused. Okay. So let's talk about specifically about spousal benefits and ex-spousal benefits. So while we'll assume the spouse or the ex-spouse is still alive to make it easy. So if I don't have enough earnings on my own record to receive my own retirement benefit, I might be considered, as you said, applying for a spousal or ex spousal benefit. That's going to be a maximum of 50% of my ex-spouse or spouse's full retirement age benefit. Again, you hear me say that full retirement age, that's a really a key number, a key date, key number. It's up to 50% of the spouse's or ex-spousal's full retirement age benefit. Right?
Karen Covy 14:35
Okay.
Eric Blake : 14:36
And if you remember, I talked about earlier. Again, we'll just keep with our 67 theme of being full retirement is being 67. I talked about earlier, if I anytime I apply for any benefit before my full retirement age, my benefit is going to get reduced, whether it's my own or that spousal benefit.
Karen Covy 14:52
Okay.
Eric Blake 14:52
So 50%, a lot of people are familiar with that 50%.
Karen Covy 14:56
Right.
Eric Blake : 14:56
But they think it's no matter what. It's not. It's 50%. Once I've reached full retirement age, once the you, as the lower earning spouse, reaches full retirement age, that's the 50% mark. If I start at 62, it's going to be closer to about 32 per 32%, 33%, depending again, your year of birth. So that's a significant decline. Again, using a three, easy, easy $3,000 a month benefit is my ex-spouse or spouse's full retirement age benefit. Half of that is $1,500. 32% of that's about a thousand bucks, right?
Karen Covy : 15:29
Yikes. All right. So that's spousal benefit. What's the survivor benefit?
Eric Blake : 15:36
Survivor benefit is going to be, and again, I want to make sure actually I'm sure we'll get into the rules around exes because that is going to be critical to what we're conversation here. But a survivor benefit basically says if my spouse or even ex-spouse, many people are actually eligible for an ex-pousal survivor benefit, that means I'm going to be able to receive 100% of what they were receiving at the time they passed or what they would have been eligible for at their full retirement age if they hadn't started yet.
Karen Covy : 16:03
Wow. Okay. So 100%.
Eric Blake : 16:05
Yeah.
Karen Covy : 16:06
That's amazing. So, all right, but what happens if let's say, and we'll get into the rules of divorce in a second, but let's say I'm claiming under my spouse's benefit, so I'm getting 50% of what he is getting. And let's say we're all at full retirement age. So just make it simple, right? Okay. We're all at full retirement age. He's getting uh $3,000 a month. I'm getting $1,500 a month because I'm getting half of his. He dies. Am I stuck with the $1,500, or can I now apply for his full $3,000 because he died?
Eric Blake : 16:44
You're going to be able to apply for the full $3,000. Yours goes away. Now keep in mind, that's one of the things. You once one of the spouses passes away, the lower benefit goes away completely. It's gone. You get to keep the higher of those two benefits. So in this case, $3,000 a month. So you get to receive that $3,000 a month going forward as the survivor benefit.
Karen Covy : 17:04
And to get it, I'm assuming, but I don't want to assume, do I have to apply for it or does Social Security just say, hey, here's what you get? You know, congratulations, you got to raise.
Eric Blake : 17:14
That is a great question. And one of the most confusing aspects of planning is that if I'm already receiving a benefit based on my spouse's record, in many cases, you'll automatically get the increase to the survivor benefit because I'm already on their record. However, if I'm on my own benefit, let's say instead you're receiving $2,000 a month, he's receiving $3,000 a month, but your $2,000 is your own personal retirement benefit, and he passes away. To get the $3,000, you have to apply for the survivor benefit. You have to go in, you actually have to schedule an appointment. It can be a phone appointment, but you have to schedule an appointment. It's not one of those things you can do online. You got to schedule an appointment, you got to apply to in order to start receiving that survivor benefit.
Karen Covy : 17:58
I love this because it's, I mean, I can see how people, if you don't know the rules, how would you know that you're supposed to do this? And then you just lose money, right? Let me ask you this. Let's say I'm uh a widow now, my spouse passed away um a year ago, and I'm claiming under my income. So I I could have been entitled to, in your scenario, an extra thousand dollars a month, right? I didn't get it. And I'm like, oh, okay. Well, I just listened to this podcast and now I know I can get it and I apply. Does it go retroactive? Can I get what I did?
Eric Blake : 18:35
You get the six months. You get the six month retroactive benefits. Yep. Now I need again, not trying to muddy the waters too much, but there's this with this big law that passed right at the beginning of 2024 called the Social Security Fairness Act. There's something called, there was something used to be called the Windfall Elimination Provision and the government pension offset. These are benefits, these are reduction of your benefits because of having a pension covered under a non-Social Security cover position. So think of teacher. So many districts or states have teachers that don't contribute to Social Security, they receive a pension from their employment. Well, the Social Security Fairness Act basically eliminated the windfall elimination provision and the government pension offset. They're gone, no longer a thing. But again, these were the windfall elimination provision reduced my own personal benefit if I had a pension outside of Social Security. But the government pension offset impacted benefits I was receiving off of somebody else, off of my spouse. 83% of the individuals affected by good the government pitch and offset before it was eliminated were women. Right? Because there's a couple of key reasons for that. One is obviously, you know, look at the percentage of teachers that are out there that are women. That's right. But I think even maybe even as big of a factor is longevity, you know, women living longer. Because again, if the government pitch and offset impacts benefits you could receive based on a spouse, that means spousal and expousal benefits, that means survivor benefits. So there were people who had pensions outside of Social Security that could not receive their husband's survivor benefit because their pension was too high. Right? That has been eliminated.
Karen Covy : 20:13
But that's not right.
Eric Blake : 20:14
I don't think my wife was a teacher for 25 years. I'm right there with you. But again, that's been eliminated. But you think about again people that might teachers or women that may have retired 10 years ago, their husband passed away five years ago, they may not have any idea that this Social Security and Fairness Act thing is out there. So in those cases, you actually could go retroactive back to January 1, but you got to know that you're eligible so that you can go back and apply for benefits, even in many cases. I I've heard stories of the Social Security Administration saying, hey, don't even apply because you're not going to get anything. Well, if you never if you never applied, you're not in the system. You got to go back and apply. You got to go back and get that money. If you applied, but then it was eliminated because you made too much money, but you did apply, they're supposed to know you're there. They're supposed to say, okay, we're going to go back and look at all these different people who applied but didn't get benefits, and now you should be getting those benefits.
Karen Covy : 21:09
Okay, but this is the government we're talking about, right? And my faith in the, you know, them just looking and going, oh, hey, we should we should be giving you money is not good. I mean, does it make sense if you're in that circumstance? Can it hurt if you just go apply anyway and say, hey, now I'm entitled to something?
Eric Blake : 21:28
But you got to know about it first. And that's why we're doing these podcasts and getting this information out there is so critical because so many people, I'm sure, still don't know that this is a thing. But you got to know about it first. So you got to get educated in some way. You got to hear it on a podcast, you got to read it on a news article, you got to find out. And then, yes, absolutely, go back to Social Security Administration and say, Hey, Is this something I could receive benefits or? Because this is a in many cases, this is a true life changer for so many women that all of a sudden now they're eligible for a survivor benefit from the husband that passed away 20 years ago. But because they had this pension, they weren't getting anything. Now they can get they can get that money and get lump sums and get all, yeah. So it was the retroactive benefit back to January 1, 2024. These were all paid out as lump sums in the middle of this year, if this past around March, April of this year.
Karen Covy : 22:15
Wow.
Eric Blake : 22:16
But you had to be number one, you had to be eligible and you had to make sure you're in the system or you had to go back and apply. So again, if you if you if people if women knew about it, it is a life changer if to add $2,000, $2,500, $3,000 a month in extra income in a situation where they might have been really struggling. I can't tell you how many stories I've heard of women that said, this is just going to change my life. And I spent a lot of time on this in my in our Facebook group and different places of just saying I just got to get this information out there.
Karen Covy : 22:44
Wow. All right, let's talk, let's shift a little bit and talk about the rules surrounding divorce, because I think that's another thing that people don't understand and they don't know what the rules are. They think, okay, if I'm divorcing my spouse, um do I am I entitled to a survivor benefit or to his um, you know, to any kind of a benefit to claim through him a spousal benefit?
Eric Blake : 23:13
Yep. So I'm gonna give you, I'm gonna give you two key numbers. If you just take nothing else from this conversation, full retirement age, what to find out what your full retirement age is. And number two, if you have been divorced, may get divorced, will get divorced, whatever the case is, remember 10 years. 10 years is the magic number. So if I've been married, if I was married for at least 10 years, and it is exactly 10 years, it's not nine years and 10 months, anything else, it's 10 years. The marriage has, and you will have to prove marriage certificate, divorce decree. Has to be 10 years exactly or more, right? If that's the case, you are eligible, you're potentially eligible for ex-spousal benefits and or ex-spouse survivor benefits, right? That's the key numbers, that 10 years. Then we start getting into age and there's some other variables there that we'll talk. I'm happy to talk through, but that 10-year mark is going to be the key one.
Karen Covy : 24:04
Okay, let's say that I've been married for more than 10 years, am now divorced. I now reach my full retirement age, but I'm remarried. Can I claim under my first spouse?
Eric Blake : 24:17
If you're remarried, you are no longer eligible for expousal benefits off of a previous spouse. Okay. And again, that's the that's the max 50% benefit. So again, uh, this is critical to distinguish between exposal benefits and survivor benefits, right? It's critical to distinguish between those. If I remarry at any point, I am no longer eligible for expousal benefits that up to 50% amount of a previous spouse.
Karen Covy :
That's what about survivor benefits?
Eric Blake :
Survivor benefits, that's the tricky one. I can remarry, but I cannot remarry before the age of 60. So if I remarry, if I remarry after the age of 60 and a previous spouse has passed away, I am still eligible for survivor benefits, assuming that marriage lasted at least 10 years.
Karen Covy : 25:05
Okay. I don't know. I just I'm thinking of this like a law school final exam, right? All changing all the variables. And you know, so let's say that I got married young. I got married to, you know, I was in my 20s. Got married, yeah. And I stayed married for a dozen years. We got divorced. Then my spouse went on to marry a second wife, and they stayed married for more than 10 years and got divorced. And I am now full retirement age, fast forward in time, right? I am now full retirement age. Can I claim on my spouse's benefit, the spousal benefit of 50%? I'm not remarried. I'm, you know, I'm full retirement age, but his second wife is claiming too. Does it matter?
Eric Blake : 25:59
It does not matter. As long as that 10-year mark has been reached, it could be three, four, you know, these days we might have three, four, five marriages floating around out there somewhere, right? As long as it lasted 10 years, I have not remarried at any point. Now, also we get into a couple of the other things that you have to be aware of, and that is the age, because again, we're talking about a benefit based on a retirement benefit, right? So I have to be at least 62 to file for ex-spousal benefits, the 50% benefit. I have to be at least 62. My ex-spouse has to be at least 62. Now, here's the difference between ex-spouse and spousal options. For ex-spousal benefits, it does not matter if my ex-spouse has filed or not. For spousal benefits, it does. So I can't actually file for spousal benefits unless my spouse, my higher earning husband, has filed for his own benefit. But ex-spousal benefits, that's not the case. He just has to be 62. I have to be 62. The divorce has to happen at least two years ago. And if I choose, I can then file for my ex-spousal benefits, that up to 50%. Keep it in mind, as always, if you do it before full retirement age, it's going to be reduced. But if you wait until full retirement age, you're going to get 50% of his full retirement age benefit.
Karen Covy : 27:17
Okay. Let's go back to that scenario again where guy has, we're going to keep it, we're going to keep it simple. He was, he only had two wives. Okay. But now he's died. And both of the wives, can each one of the wives claim the survivor benefit? So each one of them gets his full retirement benefit?
Eric Blake : 27:48
Well, now we are we saying he's divorced from both wives, just to clarify, just so we can keep the picture as clear as possible. So just for our purposes for now, let's assume they they he divorced both, right? As long as neither one of them married before the age of 60, remarried before the age of 60. Yes, both spouses could receive survivor benefits based on the same guy.
Karen Covy : 28:00
Wow. Okay. So let's say this. Let's say um that somebody wants to claim benefits based on their spouse, their ex-spouse's income, um, and they remarry at age 62, but they they're not eligible for full retirement. They claim at 67. Does it matter that they're remarried then?
Eric Blake : 28:26
Only for survivor benefits. Okay, so for survivor benefits, you have to survivor benefits are again, that's why we got to keep them separated. So if I remarry after 60, I'm still eligible for survivor benefits. If I remarry at any point, I'm no longer eligible for ex-pousal benefits at all. Unless I get remarried or he passes, my current husband passes away.
Karen Covy : 28:49
That's what I was gonna ask. Like, let's say I get remarried and then I either divorce again or my second husband dies, but at the time my I'm applying for benefits, I have two past husbands, but no current husband. You can apply for 50% of whichever one of those is greater. Oh wow. That's kind of cool.
Eric Blake : 29:11
So, yeah, so do you so just I would always keep for ex-spousal benefits, you have to be unmarried at the time to apply. That's kind of cut and dry. You cannot be married and apply for spousal benefits based on an ex-spouse is record e's still alive.
Karen Covy : 29:27
So let's say this. Let's say I am kind of a you know, a hot retiree almost, but I'm still I'm still working. So I'm I hit 67 and I'm dating somebody. Would it make sense for me to apply for the Social Security benefits based on my first husband's record? And then if I'm gonna marry guy number two, wait until after that. Does it matter if I if I'm already receiving the benefits, can I remarry then?
Eric Blake : 29:56
So again, are we talking ex-spousal benefits or are we talking survivor benefits?
Karen Covy : 30:00
Expousal benefits.
Eric Blake : 30:01
As soon as you remarry, those ex-benefit, those benefits off an ex-spouse, stop.
Karen Covy : 30:06
Ah, that's interesting to know too.
Eric Blake : 30:10
Now, it doesn't mean you couldn't then apply for spousal benefits once you've been married for a year. Now I could apply for spousal benefits based on my new spouse.
Karen Covy : 30:19
Okay.
Eric Blake : 30:20
So again, all these different moving parts. It's all you got to understand your age, you got to understand all these different variables. And that's why, again, I will tell you that when you're talking to a financial advisor, you got to make sure they are familiar with this phase of life because it is just different than you get. We're talking about all these decisions about a 65, 67-year-old. These are not the same decisions the 37-year-old is making. So if you're telling me if you're telling me a financial advisor can be a specialist in the 37-year-old and then also be a specialist in this stuff, I don't believe you.
Karen Covy : 30:53
Yeah, this is there is a lot here. And what I'm gathering from you, like the 2024 changes, but like it's evolving. It's always changing, and it's something that I would think a financial advisor has got to be keeping up with, or they're not going to be accurate.
Eric Blake : 31:10
Yeah, I would I would again, I that's one of the things I encourage our prospective clients. Again, we work primarily with women. Ask me these questions. How do you keep up with the changing tax laws? What do you do to make sure you're staying on top of these? That you're understanding Social Security and taxes, and distribution rules, and Secure Act, and Social Security Fairness Act, and OBBBA. And what are you doing to keep up with all this? Ask that question. If you're considering hiring a financial advisor, please feel empowered to ask those questions because that's the only way you're going to get the right person for your situation is if you ask those questions.
Karen Covy : 31:44
Yeah, because a lot of people when they start asking the questions in the context of divorce is when they finally got a settlement proposal and they're trying to evaluate am I better with proposal A or B or C, right? Which one is going to put the most dollars in my pocket? And what I'm hearing you say is that the if you're later in life, which I mean, gray divorce is the biggest thing ever in our history right now. And so if you're at age 50 or above and you're trying to figure out what your future looks like in terms of dollars in your pocket and social security and retirement and all those things, you need to talk with somebody who actually knows the rules of Social Security, or you're not going to make the right decision.
Eric Blake : 32:33
Right. And that's a key, because you know, as you know, CDFA, certified divorced financial analysts are hugely important in their role. But depending on whether they're supposed to be that objective third party where we're trying to break all the assets down and figure out, you know, what's in what's a fair split, that may not necessarily tell you, well, what is my income scenario going to be looking like once this is all said and done. Now, Social Security being an analyst as bad a rap as Social Security gets, everybody talks about, well, it's going to run dry. So what difference does it make? I'll start earlier, I'll start later, I'll start whenever. And they'll use those different reasons as a reason to bash Social Security. Whatever you think about Social Security, for most people, it is the single source of lifetime guaranteed income that increases every single year based on inflation. Right? So the decisions you make around that income are critical. And again, no matter what you're thinking of is about social security, how bad it is, how good it is, whatever it might be, there's something about this source of guaranteed again for the most people, and there's obviously people who have enough money that it just doesn't really matter. But that's not most people. Most people, the decisions they're making around Social Security are a huge component of their retirement income strategy. Now, actually, as you also know, you can't negotiate Social Security.
Karen Covy : 33:47
Right.
Eric Blake : 33:47
But as you're trying to make these critical decisions about splitting assets and what assets I'm going to get over here, and am I getting retired IRA assets versus taxable assets and all these different things that are going to come into play? Knowing what your income situation is going to look like really becomes critical when we say, okay, well, if I'm only going to get 50% of his benefit once I'm eligible, does that lean us towards having to figure out where else am I going to get my income? Does that mean I need spousal support on top of whatever the asset split is, or am I going to get enough assets to provide a reasonably a reasonable lifestyle? So all those types of things come into play. And again, so whatever you're thinking about, whatever your negative or positive thoughts about Social Security are, it really still has to be part of the equation.
Karen Covy : 34:32
100%. And you mentioned something, and I know what you're talking about, but I'm not sure that everyone out there listening does. So for those of the of us, of the people who are listening, you said spouse or social security is not negotiable. What do you mean by that?
Eric Blake : 34:46
So I mean that the Social Security, you can't say, well, I want you to give me more, I want you to give me 75% of your benefit instead of 50%. You can't do that. The rules of Social Security are what the rules of Social Security are. You just got to make decisions, an educated decision on the other stuff, the assets, the other, any other income, pension income, whatever else is out there that's going to be part of this divorce settlement. How does that, how does Social Security fit in with that? How do the rules of social security gonna fit into that to help me make a better decision, hopefully, on that other stuff, knowing what my options are gonna be with Social Security?
Karen Covy : 35:19
Right. So if somebody, you know, and I've seen the the cases where the spouses are so angry with each other. I mean, the higher earners just like, no, I don't want you getting half of my benefit. And it's not their choice, right?
Eric Blake :
No matter what. We don't even have to know, honestly. I mean, there's yeah, as long as you can pursue documentation, they would never know. Like your example of you might have three, four wives, they may know you don't have to tell them that you're filing based on their record because you're just eligible for you just go to the social security administration, you file, do what you got to do.
Karen Covy :
Do they get notified? Does the higher earner or the ex-spouse get notified?
Eric Blake : 35:58
No, no. So again, you got to provide the documentation, your divorce decree, your marriage certificate, all that stuff. As long as you can verify that information, they don't have to have, they have no idea.
Karen Covy : 36:08
Let me ask you that that brings up sort of the practical question, which is when you go to apply, let's say you are applying based on your ex-spouse's benefit level, besides a marriage certificate and a divorce decree, what else are you going to have to bring to prove that so that people know what documentation to save?
Eric Blake : 36:30
That's really it. Those two, those are the two key pieces of information. Yeah, divorce decree and marriage certificate. As long as you can document that and it shows the dates, all that good stuff, you're good to go.
Karen Covy : 36:39
So you don't need like tax returns or anything like that.
Eric Blake : 36:43
Okay, because we're all in the system. So you so you're in there and it's all you're yeah, it's the divorce decree and the marriage certificate are the key documents that you'll want to make sure you've got access to.
Karen Covy : 36:56
Okay. So this is so fascinating, and there's so much more, and we're already running up to time. I'm probably gonna have to have you back again. But I know that you have like incredible resources for people who are facing these problems and trying to figure this out. Can you tell the audience about what you've got for them?
Eric Blake : 37:18
Absolutely. So I'm gonna share a link. I'm gonna provide this to you, and I think I may have already gotten it to you, but if not, I'll make sure you get it. This is our complete guide to women's social security success. And this is our most popular, our six most popular guides and checklist on Social Security helps you determine what my eligibility is for spousal benefit, next spousal benefits, and survivor benefits and circumstances that you might not be aware of around what could what other factors could reduce my benefits. And if you go to womenssocial securityguide.com, all one word, womenssocialsecurity guide.com, you can go there, you can download this free resource. Again, it's got checklists, got everything you'll want and look at to help determine what you're eligible for and how to make some of these critical decisions. And it's even our quick reference guide is the very first document on there, full retirement age numbers, reduction percentages of benefits that you want to be aware of. That we talked about the 50% versus the 32.5%. All that is in there. So you can have quick reference to see that, plus the different guides that'll walk you through your potential eligibility options.
Karen Covy : 38:22
Wow. This is there, this is so much. But what if somebody, even with your guide, they're like, I don't know, I need help. Where can they find you? Because we'll link to all the guides and everything in the show notes. Where can they find you?
Eric Blake : 38:37
So I'll give you first of all our website, blakewealthmanagement.com. That's where we do our that's our advisory practice. And again, our primary focus is on women. You'll see right at the top of the page retirement planning for women over 55. That's our primary focus. And just so we've addressed it, you'll scroll a little bit farther. It says, yes, we do work with couples, but it is critical that both spouses are part of the planning process. We will not just say the husband comes in and the wife chooses to come in from time to time. Both spouses must be involved. So that's that would be uh option one. Option two is our podcast, the Simply Retirement Podcast.com. I cover all these different topics. You'll go, you can go in if you want to hear me talking about the Social Security Fairness Act or the top five things all women need to know about Social Security, the top five questions on Social Security Survivor Benefits, all that is there. That's our website for the podcast. We've done 80 something episodes, and it's probably a fourth of those are on Social Security because it's such a critical topic. And I think it's one of those things, again, to make the best decisions possible in divorce circumstances or widowed circumstances. Understanding social security is such a critical component.
Karen Covy : 39:44
Right. I mean, it's critical and it's complicated.
Eric Blake : 39:48
Way more complicated than it needs to be.
Karen Covy : 39:51
Yeah, it those two are not a good mix. So for those of you who are listening, I highly encourage you to check out Eric's website, get all the downloadables. If you're, I mean, at what point do people need to start thinking about this? Age 50?
Eric Blake : 40:05
I think you know you want to start thinking about as early as possible. But you know, I I encourage you, you know, when you do when you're starting to plan, you know, full retirement age. We talked about that a lot in this episode. Know what your full retirement age benefit and just use that as your starting point. Again, then as life happens, you can adjust. If I say, hey, I for whatever reason I got to start at 62, or you know, I think I'd rather wait till 70. Start as reasonably early as possible, know your full retirement age benefit estimate, and then kind of base things off of that.
Karen Covy : 40:34
Wow. Eric, thank you so much for this. I mean, my head is a little bit exploding at the moment. I'm sure, I'm sure. But in a good way. So I really appreciate it. Thank you so much for sharing all your wisdom with us, with the listeners.
Eric Blake : 40:48
It was an honor.
Karen Covy : 40:50
So, and for those of you who out or out there watching or listening, if you enjoyed today's episode, if you want to hear more episodes just like it, and especially if you want us to bring Eric back, do me a big favor. Give this episode a thumbs up. Like the podcast, subscribe to the podcast, subscribe to the YouTube channel, and I look forward to talking with you all again next time.
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