I recently had the pleasure of talking with one of the country's top retirement experts, and I came away with several ideas to maximize my Social Security benefits -- oh, and probably yours as well.
Jean Setzfand is the vice president of financial security at AARP in Washington, D.C. During our chat, I asked her about some of the biggest misconceptions people have about Social Security. She told me they center on some frequently asked questions:
- I'm divorced. Is it possible my ex-spouse could delay or lower my benefits?
- If I work too much, will I lose Social Security benefits?
- Is delaying my benefits always the best way to increase my Social Security income?
Here's what Setzfand had to say about these Social Security myths:
Let's recap what she said.
If you have been married, or were previously married, for at least 10 years, your spouse or ex-spouse may have access to spousal or ex-spousal Social Security benefits through you. However, our ex cannot take away your benefits or reduce your benefits by tapping into his or hers early.
Here are some other things to consider, taken straight from the official Social Security website:
- If you remarry, you generally cannot collect benefits on your former spouse's record unless your later marriage ends (whether by death, divorce, or annulment).
- If your ex-spouse has not applied for retirement benefits but can qualify for them, you can receive benefits on his or her record if you have been divorced for at least two years.
Working after you begin to collect Social Security benefits
You cannot lose benefits by working too much after you've started collecting your Social Security income. If you earn more than a certain amount, you may be reducing your potential benefits before your full retirement age (which is between 65 and 67, depending on your date of birth), but you'll actually be "banking" those benefits and getting them back at full retirement. After your full retirement age, you can't reduce your take-home no matter how much money you make.
It's not always better to delay taking benefits
While AARP's normal advice is to delay taking your benefits as long as possible in order to maximize your monthly take-home, there are cases for dual-earning spouses when it's better to tap in earlier. If the higher-earning spouse waits for full retirement age, that person can unlock a spousal benefit for the lower-earning spouse to tap into sooner rather than later. This can give the lower-earning spouse the ability to wait and accrue maximum benefits by waiting until age 70 to tap into his or her own account.