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Question

My niece, born in April 1955, was married to her husband for 10 years. They divorced in the 1990s. Shortly after that he had brain surgery and was subsequently disabled from work, so he started to collect his Social Security disability payments.

My niece has never worked so the only way she can collect Social Security is on his work record. My niece reached full retirement age of 66 and two months in 2021. She has been hesitant to sign up for Social Security benefits because people are telling her that if she waits till age 70 she will get more money. Is this so? Others tell her that since it is not her work record and that the fact that he has not worked for 25 years or so because of disability, she will not get any more money by waiting to age 70.

I should also add that she herself is disabled and collects SSI monthly. She feels that she will lose the SSI if she signs up for Social Security and then be worse off. Any guidance on what will happen to her if she applies to social security on his work record?

Answer

There are certainly many moving parts with your niece’s situation, says Mindy Neira, CFP®, ChSNC®, a senior financial advisor with Modera Wealth Management.

“In short, yes, she can collect spousal benefits from Social Security since she is over age 62 and they were married for at least 10 years. If her ex-spouse is not already receiving benefits, the divorce must be at least two years old. Her full retirement age (FRA) is 66 and 2 months, so she may receive up to one-half of the amount her ex-spouse is entitled to receive at their full retirement. The increased amount by delaying to age 70 does not apply to spousal benefits, though if she were younger than FRA the amount would be reduced.”

“By collecting the spousal retirement benefits, says Neira, “your niece’s Supplemental Security Income (SSI) amount will be affected by this unearned income.” She explains, “The first $20 of income she receives would not be counted, along with additional exclusions if they apply to her. The remaining amount is “countable income,” which is deducted from the federal benefit rate amount.” The 2021 federal benefit rate was $794 monthly.

“So, as an example,” Neira says, “let’s say your niece were to receive $500 from her spousal retirement benefit: $500 - $20 = $480 is countable income. The federal benefit rate less the countable income ($794 - $480) results in $314 in SSI benefit. Combined, she would receive a total of $814 monthly in this example. Receipt of $1,000 from a spousal retirement benefit, would eliminate qualification from SSI.”

Neira adds, “As you can see in this example, though SSI is affected, your niece may still be in a better place financially by receiving a combination of benefits or switching to the spousal retirement amount entirely. To apply for spousal benefits, she should reach out to Social Security directly and will need to provide certain documents and provide additional information about herself.”

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Question

My niece, born in April 1955, was married to her husband for 10 years. They divorced in the 1990s. Shortly after that he had brain surgery and was subsequently disabled from work, so he started to collect his Social Security disability payments.

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