That is the newest in a sequence of biweekly articles that includes Social Safety claiming case research drawn from the ALM publication “2024 Social Security & Medicare Facts,” by Michael Thomas with help from Jim Blair, a former Social Safety administrator, and Marc Kiner, a planning skilled with intensive expertise in public accounting.
The State of affairs: Two Divorces and Two Deceased Ex-Spouses
Amanda is a single taxpayer who was married to each of her ex-husbands for greater than 10 years, and each ex-spouses have handed away. This implies Amanda is now eligible for survivor advantages from both divorced partner’s document, or she will draw her personal retirement advantages.
Having been born in November 1964, Amanda’s full retirement age is 67, at which period her personal full retirement profit could be $1,548. Her actuarially projected longevity is a bit of over 87.
Amanda’s first deceased ex-spouse additionally has a full retirement age, or FRA, of 67, at which period he would have been eligible for $2,186 in month-to-month funds. The second deceased ex-spouse likewise has an FRA of 67, with a bigger advantage of $2,457.
On this situation, Amanda can take a wide range of claiming approaches. To begin, she will file for both ex-spouse’s profit at age 60, or she will declare her personal employee profit at age 62 and 1 month. Additionally amongst her choices is claiming one survivor profit to start with (i.e., earlier than full retirement age) after which change to the next profit at a later age.
Notably, regardless that Amanda is eligible on her personal work document, in apply she’s going to find yourself taking solely surviving divorced spousal advantages, as each are larger than her personal. That’s, her personal profit elevated for full delayed retirement credit at age 70 isn’t larger than both of the divorced spousal advantages out there to her.
So, ultimately, Amanda has three major claiming eventualities to think about, and the distinction between essentially the most and least optimum methods is about $130,000 in further projected advantages.
What the Numbers Present
The least efficient technique would see Amanda wait to file in November 2031 for 100% of her surviving divorced partner profit from her second husband, giving her a month-to-month cost of $2,457. This leads to a complete lifetime profit projection of $604,422.
A greater technique could be for Amanda to file at age 60 in November 2024 for a decreased survivor profit from her second deceased ex-spouse, which might give her a month-to-month cost of $1,756. She would then file in November 2031 for her full surviving divorced spousal profit from her first partner, which will increase her month-to-month cost to $2,186.
This second strategy delivers a projected $685,260 in complete projected advantages.
Lastly, one of the best technique could be for Amanda to flip the script and file at age 60 in November 2024 for a decreased surviving ex-spousal profit on her first partner’s earnings document, giving her a month-to-month cost of $1,562.
