Social Security for Divorcees (2018)

#1. Make sure your earnings record has been recorded correctly.

#2. Every year you work could increase benefits.

#3. Coordinate your benefits with your spouse.

#4. MINIMIZE taxes by understanding how Social Security is taxed. See this video.

#5. Take advantage of your TWO Standard Deductions. (Married filing jointly over 65 you have $26,600 of Standard Deductions. In GA, you also have $130k income exempted from taxation.)

#6. Delay, delay, delay!!!  Every year you delay gives you more tax favorable income.

Part Two:

 

 

Maybe the best financial planning I’ve ever conducted is working with ex-spouses in planning for their retirement.

I can’t tell you how many ex’s do not understand the benefits they are entitled to off their ex-spouses record.

And once they are made aware of this opportunity, it’s like a dark curtain is lifted and a whole world of new opportunities opens in front of them.

For instance, I had a client who lived in Pennsylvania. She had been married many years to a high-income doctor. But, as is this case with 50% of marriages, they divorced.

My client wanted out of the relationship as quickly as possible and turned out, in hindsight, she didn’t hold out for as much as she probably should have.

And now, as retirement approached, she was worried how she was going to pay for everything. She was especially worried about if she had a long term care need and would have to have her daughter care for her.

It was very important to her to have Long Term Care Insurance policy. But it was out of her reach given her limited retirement income.

So, here comes ole Josh. And I simply asked her, “were you married more than 10 years?”

“Yes,” she replies.

“Do you plan on getting remarried anytime soon?”

“Nope.”

“Were you making much money when you were married?”

She chuckled at this. “Hardly! I was taking care of the kids. So I had NO INCOME!”

Light goes off over my head. She needs to march down to the Social Security Administration office and see if she can qualify for a spousal benefit on her Ex-hub’s record.

“But what if he says no?” She asks me.

“Doesn’t matter, because he will NEVER KNOW! Has NOTHING to do with him.”

Long story short, she qualifies for an additional $300-$400 a month or so on his record.

That was almost the EXACT cost of her Long Term Care Insurance policy too.

So, it was a win/win for her.

She felt a bit more vindicated in not holding out for more assets from her divorced husband. And she was able to get more income to cover an insurance policy she wanted.

Will this happen all the time? Of course not.

Does it happen enough, though, that it’s worth pursuing?

Absolutely!

It’s YOUR money too!

https://www.ssa.gov/OP_Home/handbook/handbook.15/handbook-1510.html
https://blog.ssa.gov/ex-spouse-benefits-and-you/

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