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Social Security is a critical component of retirement planning for many Americans. Whether you’re approaching retirement, managing benefits for a spouse, or planning for the future, understanding how Social Security works — and how to maximize your benefits — is essential. 

 

Here we break down key aspects of Social Security, from early  collection and widow/widower benefits to government pensions  and the intricacies of divorce, helping you make informed  decisions about your financial future. 

 

 

The Early Bird May Not Always Get the Worm 

 

For many people, the decision to begin collecting Social Security benefits can be a tough one. The earliest you can start receiving benefits  is at 62, but this choice comes with a significant trade-off.  Collecting before reaching your full retirement age—typically  between 66 and 67—results in a reduction in monthly payments. 

 

Starting at 62 can cost you as much as 30% compared to waiting  until your full retirement age. While this may seem like an  attractive option in the short term, it’s important to consider the  long-term consequences. This reduction is permanent, meaning  you’ll receive a lower lifetime benefit, potentially adding up to a  substantial amount of lost income over the years.

 

Before you decide to take the plunge early, it’s also essential to  think about your future eligibility for other benefits. For example,  early collection may impact access to healthcare benefits or state based assistance programs. This could complicate your financial  planning. 

 

 

Widow/Widower Benefits 

 

Losing a spouse is difficult, and the emotional strain can be  severely compounded by financial concerns. Fortunately, Social  Security offers widow and widower benefits, which can help  provide financial support in challenging times. You can begin  collecting survivor benefits as early as age 60 — or even earlier if  you have a dependent child under 16. 

 

For those who were married for at least 10 years, the length of  your marriage can significantly affect the benefits you may be  eligible for. If you’re divorced, you can still collect Social Security  benefits based on your ex-spouse’s earnings record, regardless  of whether they have remarried. This means that even if you’ve  gone separate ways, you may be entitled to benefits based on  their lifetime earnings. 

 

 

Accessing Personalized Information: The Key to Smart  Planning 

 

My Social Security 

 

When it comes to Social Security, one size doesn’t fit all.

 

The best way to understand your benefits is to access  personalized information tailored to your unique situation. By  creating an account on the mySocialSecurity website, you can  track your earnings history, estimate your future benefits, and get  an idea of what to expect at different ages. 

 

The site also offers tools like the Social Security Statement and  Retirement Estimator, which can help you evaluate various  collection strategies — and plan accordingly. 

 

 

Government Employment and Social Security… 

 

If you or your spouse worked in government service, you may  encounter a few unique situations when it comes to Social  Security benefits. For example, government employees who are  part of public pension systems (such as the Ohio Public  Employees Retirement System (OPERS)) may face a reduction in  Social Security benefits due to how these pensions interact with  Social Security coverage. 

 

The key factors to consider are the Windfall Elimination Provision  (WEP) and the Government Pension Offset (GPO). These rules  can limit the amount of Social Security you or your spouse can  receive if you’re also receiving a pension from non-Social  Security-covered employment. It’s important to understand how  these provisions could affect your survivor benefits, as they can  sometimes reduce the benefits available to spouses or  dependents. 

 

 

Divorce Doesn’t End Your Social Security Benefits

 

Going through a divorce doesn’t mean you lose access to Social  Security benefits based on your ex-spouse’s earnings. 

 

If your marriage lasted at least 10 years and you’re now divorced  (and not remarried), you may be eligible for spousal benefits  based on your ex’s work history. 

 

Timing is key in this process. If you’re considering collecting  benefits based on your ex-spouse’s record, it’s crucial to  understand the rules and how the timing of your election can  affect the amount you receive. For example, if you begin  collecting before full retirement age, your benefits will be reduced,  as mentioned above. If you wait until full retirement age, you can  maximize the amount you’ll receive. 

 

 

Disabled Children: Social Security Benefits for Families 

 

In addition to covering adults, Social Security also offers benefits  for children — not a lot of people know that — including disabled  children under age 18 (or up to 19 if still in high school). If a child  has a disabled or deceased parent who qualifies for Social  

 

Security, the child may be eligible to receive a portion of the  parent’s benefit. 

 

While the benefit amount depends on the parent’s earnings  record, there are some important things to know. For example,  Social Security has a family maximum, which means the total  amount that can be paid to a family based on a parent’s record is  capped. And if multiple family members are collecting, this could  reduce the amount the child is eligible to receive.

 

Surviving the Intersection of Social Security and Government  Pensions 

 

For those who worked in government positions, it’s vital to  understand the relationship between Social Security and  government pensions. The rules governing how these two  systems interact can get complex, especially when it comes to  survivor benefits. 

 

The Windfall Elimination Provision (WEP) and Government  Pension Offset (GPO) are designed to prevent people from  receiving “double benefits” if they receive a pension from a job  where they didn’t pay into Social Security. I mean, fair enough,  right? But these provisions can reduce your survivor benefits, so  it’s important to review how your government pension interacts  with your Social Security benefits to avoid any surprises. 

 

 

Making the Right Decisions for Your Future 

 

By using the tools available on the Social Security website,  consulting with a financial advisor, and staying informed about  changes in the law, you can make more informed decisions about  when and how to access your benefits. With a little preparation,  you can maximize your Social Security benefits and secure a  more comfortable financial future. And that’s a good plan. 

 

Remember my mantra to all my clients: Invest wisely and Retire  On Your Terms!  

 

 

Marc Goldstein, our Finance Editor, is a nationally known Financial Educator and Retirement Wealth Specialist, who helps people protect and pass on their wealth.

 

https://www.mgoldsteinassoc.com/