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Balancing act: Reader seeks Social Security clarification

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As I've written before, every Social Security question that I answer seems to bring more requests for information and clarification.

Such was the case with last week's column featuring Nancy, a 52-year-old who is trying to figure out whether she should go back to work in order to receive more Social Security credits.

The response led to follow-up questions from Klaus.

"The part about Nancy being able to get the higher of her benefit or half of her spouse's as a living benefit versus survivor benefits was news to me," Klaus wrote. "She had 22 credits, and I assumed to qualify for this living benefit option, you needed to have a minimum number of credits. The wording in the article made it sound like that was not true.

"It almost sounded like a couple with only one wage earner could get 150 percent of the benefit by having both claim benefits. I knew that was true in the case of divorce but have never heard that it applied to married couples. Could you clarify how that works?"

Well, Klaus, I'll do my best. And for help, I turned once again to Sharla Jessop at Salt Lake City-based Smedley Financial Services, who assisted with last week's column.

First off, Sharla suggests that readers who have further questions check out ssa.gov, the official Web site of the Social Security Administration. It offers answers to many frequently asked questions.

Regarding Klaus' questions, Sharla says it is true that if a spouse has not worked under the system and has not received Social Security credits, that person is still entitled to one-half of a spouse's benefit when the person reaches full retirement age.

In other words, if a working spouse is eligible for a certain amount at full retirement age, a nonworking spouse is eligible for 50 percent of that amount.

Furthermore, Sharla says, "Let's say that someone works and they have enough credits, but their benefit is low. They're going to receive the higher of the two benefits."

She says this situation is common among women who work outside of the home early in their lives, stay at home when their children are young, then go back to work when their children are older. Such a person may receive a full 40 credits in the Social Security system, but her full benefits could still be lower than 50 percent of her spouse's benefits at full retirement age. In such cases, the total amount the woman would receive would be equal to the higher amount.

Regarding Klaus' other questions, Sharla says it is true that there is no minimum number of credits required to receive this spousal benefit. And it's also true that, at full retirement age, a couple with only one wage earner could get 150 percent of the working spouse's benefit by having both members of the couple claim benefits.

"A lot of people don't realize that," Sharla says. "A lot of people don't think that their spouse will be eligible for anything."

When people find out about the spousal benefit, she says, they are often quite pleased. But she again cautions that people should not depend on Social Security to fund their retirement plans.

"It's so important that people plan for retirement excluding

those kinds of benefits," Sharla says. "Their Social Security statement is only an estimate of benefits, and that can change up until the time they receive it."

Good information, Sharla, and a good warning.

If you have a financial question — even if it's about the dreaded topic of Social Security — or comment, send it to gkratz@desnews.com or to the Deseret News, P.O. Box 1257, Salt Lake City, UT 84110.

E-mail: gkratz@desnews.com