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What LGBTQ Couples Need to Know About Social Security

Understand the many rules and strategies surrounding your Social Security benefits, especially for members of the LGBTQ community.

By Ryne Vickery, CFP

One of the rights that same-sex couples won in a landmark June 2015 Supreme Court decision is the same entitlement as heterosexual couples to important government benefits such as Social Security, Medicare, and Supplemental Security Income payments. In its decision, the court ruled that same-sex couples have a constitutional right to marry in all 50 states and to have their marriage recognized by other states. 

Ryne Vickery

Ryne Vickery

Additionally, the government now recognizes certain non-marital legal relationships, such as civil unions and domestic partnerships. The end result has been a greater number of couples obtaining the same privileges as heterosexual couples. As you might expect, these welcome developments also often carry some significant financial planning implications. Let’s dive in.

Marital Status Is Important for Social Security Benefits

When you are legally married, you have the option to take your own Social Security benefit or to take a spousal benefit, which is 50% of your spouse’s Social Security benefit. Same-sex couples did NOT have this option until relatively recently, and it’s very important when it comes to maximizing your household’s lifetime Social Security benefits. For instance, if one spouse was eligible for the maximum Social Security benefit (for 2021, $3,148 per month at full retirement age) and the other spouse was eligible for a $500 per month benefit, being able to take advantage of the spousal benefit and get half of the higher-earning spouse’s much larger benefit adds up to a huge amount of money over this couple’s lifetime.

In addition to spousal benefits, same-sex couples also can claim survivor benefits, where the surviving spouse can claim 100% of a higher-earning spouse’s Social Security benefit after they have passed away.

Should You Delay Claiming Your Social Security Benefit?

You may have an urge to take your Social Security benefit as soon as possible at age 62, or right when you reach full retirement age (66 or 67). However, when you make the decision to draw your Social Security, the amount you receive is locked in and will not change except for cost-of-living adjustments.

If you wait longer to claim your benefits, you will receive a higher base benefit amount. But waiting may not make sense for you, so I would suggest using a more scientific method of determining how to maximize your benefits. A big piece of the decision has to do with your life expectancy. If you do not expect to live long, it may be best to draw sooner. If you have a healthy lifestyle and your parents lived to age 100, you may want to wait until 70 to take the maximum benefit amount.

This strategy can also be considered longevity insurance, and it may help increase your odds of not running out of money in retirement. Each situation is different, and it’s best to conduct a break-even analysis to help estimate the proper age to claim Social Security to maximize your benefits.

More Same-Sex Couples Are Now Eligible for Survivor Benefits

Until November 2021, a surviving spouse or partner was only eligible to collect Social Security survivor benefits if the couple had been married for more than nine months. However, due to marriage bans, same-sex couples have not always had the freedom to marry, yet they’ve paid into Social Security for their entire working lives. This means that if your marriage or domestic partnership was not considered legal prior to 2015 and your partner passed away, you weren’t eligible to claim survivor benefits. In fact, even after same-sex marriage was legalized, if your spouse passed away within nine months of your newly legalized marriage, you still couldn’t claim survivor benefits.

However, after lawsuits were filed, the courts intervened and ruled that excluding partners from their benefits is unconstitutional. This opened the door for potentially thousands of partners who couldn’t marry previously to now claim benefits. Someone who thought they were previously ineligible may now be eligible, which can have a huge impact on financial security.

It is important to understand the many rules and strategies surrounding your Social Security benefits, especially for members of the LGBTQ community. Be sure to assess your options and understand how to best maximize your benefits to improve your chances of a successful retirement.

About the author: Ryne Vickery, CFP®

As a Wealth Advisor with Buckingham Strategic Wealth, Ryne works with his advisory team to develop comprehensive financial life plans for professionals, retirees and near-retirees, and same-sex couples who want to align their money with their goals and values.

Important Disclosure: The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Wealth®. This article is for general and educational information only and is not intended to serve as specific financial, accounting, legal, or tax advice. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by an individual for the purpose of avoiding penalties that may be imposed by law. Individuals should speak with qualified professionals based upon their individual circumstances. The analysis contained in this article may be based upon third-party information and may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, confirmed the accuracy, or determined the adequacy of this article. IRN-21-3008


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