Dear Penny: I’m Disabled, Married and Nearing Retirement. How Can I Maximize My Social Security Benefits?
I’m 60, divorced and disabled. Eleven years ago, I remarried to a guy who served in the Navy, and now works for the Navy as a civilian. He’s 59 and will retire from his job in November.
I was a homemaker in my first marriage, and my ex only let me work part time after I got my teaching degree. I suffered a traumatic brain injury in a car accident a few months before leaving him. I get SSDI, about $1,000 per month, plus $300 for my child, age 9. I use my check to pay for gas, groceries, our phone plan and incidentals for my father’s care. My husband covers everything else, including savings, which are all in his name. We live with and care for my father in his home, and own a farm in a neighboring state.
My health is better than my husband’s, and we both expect I’ll outlive him. How do I maximize my Social Security retirement check when retirement comes? My understanding is SSDI automatically converts to SSR at age 62, but if it makes sense to do so, I can step away from SSDI and avoid the conversion. My husband’s earnings are eight to 10 times what mine were, so taking retirement on his record seems like the sensible thing to do.
Thank you,
Trying To Plan
Dear Trying,
Short answer: Wait until you turn 67 to apply for your husband’s Social Security, and you’ll get the maximum amount from both of your accounts. Here’s why:
When you receive SSDI (a.k.a. disability) benefits, they’ll automatically convert to Social Security retirement (SSR) benefits once you reach full retirement age. That age is based on the year you were born; for you and anyone else born in 1960 or later, full retirement age is 67 (not 62). When your benefits convert, the amount will remain the same as what you receive now.
If your husband dies before you reach full retirement age, you’ll be eligible to receive both the survivor (a.k.a. spouse’s) benefit from his Social Security — up to 50% of his SSR amount — and your SSDI benefit payments. However, you’ll receive a smaller monthly payment if you apply for the survivor benefit before full retirement age.
When you reach full retirement age, you’ll be eligible to receive both your SSR and 100% of your survivor benefit, up to the total amount of whichever is higher. For example, if you receive $1,000 SSR and the survivor benefit is $2,000, you’ll receive $1,000 from your account and $1,000 from your husband’s account for a total of $2,000 each month. Contact the Social Security Administration when you near full retirement age to make sure you take any necessary steps to apply for both benefits.
Your child will also be eligible for a survivor benefit from their father’s account as long as they’re unmarried and under age 18, in grades K-12 or disabled.
Dana Miranda is a Certified Educator in Personal Finance® and author of YOU DON’T NEED A BUDGET. She writes Healthy Rich, a newsletter about how capitalism impacts the ways we think, teach and talk about money.
