Cancer diagnosis complicates Social Security plans
Q: My wife, who has cancer, is 48 years old, on Social Security disability and will start Medicare in January. I had to quit my job to take care of her and my 12-year old son. I am 59 years old and don't expect to be able to return to work. She receives $2,000 a month and my son receives $1,000 a month from Social Security Disability Insurance. What are my options when I am 62? Can file for my Social Security? Can I claim spousal benefits and let mine grow to full retirement age (FRA)? My benefit amount at 62 will be around $1,200. There is little to no information on my situation out there. Also, is there any other avenues that you know of to help us? ��� Peter Jorland, Minnesota
A: Unfortunately, you will not qualify for a spousal benefit because your benefit is higher, says Elaine Floyd, the director of retirement and life planning at Horsesmouth. “The strategy of taking a spousal benefit and letting your own benefit grow is being phased out under the Budget Act passed last year, and you are not grandfathered,” says Floyd.
When you turn 62, Floyd says you may file for your own reduced benefit, but that will be your permanent benefit unless your wife passes away, in which case you would be able to transfer to a survivor benefit of about $2,000 per month - assuming you file for it at your full retirement age or later.
“I'm sorry to say this, but your strategy will depend on your wife's life expectancy,” says Floyd. “If she has beaten the cancer and expects to live a long time, I would encourage you to delay your benefit to full retirement age or later in order to maximize your lifetime benefits.”
But if your wife has a short life expectancy, you could go ahead and claim your own reduced benefit at 62 because he would be jumping up to the higher survivor benefit, says Floyd.
Robert Powell is editor of Retirement Weekly, contributes regularly to USA TODAY, The Wall Street Journal and MarketWatch. Got questions about money? Emailrpowell@allthingsretirement.com.