The Good News and Bad News About Social Security for Widowed Parents

Join us as we sit down with Certified Divorce Financial Analyst and Founder of the non-profit organization, Savvy Ladies, Stacy Francis, to discuss social security laws and how they impact widowed parents. In this interview, Stacy discusses the following:

•    Who qualifies for Social Security survivors’ benefits?
 •    What is the difference between spousal benefits and survivor benefits?
 •    How does the Social Security Administration handle survivors benefits for widows with dependent children, and what factors determine eligibility for these benefits? 
 •    What happens to widows who get remarried?
 •    What happens to widows who go back to work?
 •    What are the potential advantages of delaying social security benefits for widows? 
 •    Can you collect both survivor benefits and spousal benefits at the same time?
 •    What advice do you have for widows who are struggling to navigate social security and other financial matters during such difficult times?
 •    Are there any recent updates or changes to social security laws that widows should be aware of, and how might these changes impact their benefits? 

If you would like to speak with one of our attorneys, please call our office at (503) 227-0200, or visit our website at https://www.pacificcascadelegal.com.

To learn more about Stacy can help you, you can visit her websites: https://www.savvyladies.org/stacy-financial-advice/ and https://francisfinancial.com/

Disclaimer: Nothing in this communication is intended to provide legal advice nor does it constitute a client-attorney relationship, therefore you should not interpret the contents as such.

Transcript

Intro:
Welcome to Modern Family Matters, a podcast devoted to exploring family law topics that matter most to you. Covering a wide range of legal, personal, and family law matters, with expert analysis from skilled attorneys and professional guests, we hope that our podcast provides answers, clarity, and guidance towards a better tomorrow for you and your family. Here's your host, Steve Altishin.

Steve Altishin  
Welcome, everyone. I'm Steve Altishin, Director of Client Partnerships at Pacific Cascade Legal, and today I'm here with Certified Divorce Financial Analyst and founder of the nonprofit organization, Savvy Ladies, Stacy Francis, to discuss social security laws and how they impact widowed parents. Well, that was a mouthful, Stacey, how you doing today?

Stacy Francis  
I'm doing fabulous. Steve, I'm so excited to be talking about Social Security. It's one of the most complicated misunderstood things that can put literally 1000s, even 10s of 1000s of dollars back in people's pockets if they if they know the information they need to, to know.

Steve Altishin  
Well, I love it. I love it. You know that in Medicare, it's like, lawyers have no idea what this stuff is. So the people that we serve, this is a great thing for them. 

Stacy Francis  
It sure is, it sure is. 

Steve Altishin  
Before we start, can you tell us a little bit about yourself? 

Stacy Francis  
Sure. I feel like I have the best job in the world, I am fortunate enough to get to work primarily with women, helping them really build their financial security after divorce during the divorce process. And, and a lot of our clients, their spouse has passed away. I personally saw growing up how important it is for, you know everyone to understand their finances. But really, especially for women, my grandmother was in a very unhealthy marriage, it was actually an abusive marriage. And she never left and she she she struggled to be able to leave and shared that she felt financially trapped. And a lot of women do find themselves in difficult situations, unhappy marriages, and even exiting that marriage, you know, just not having the financial knowledge that they need to be able to move forward in their life with with real confidence. And that's why I love this work so much, and why I just jumped at the chance to talk about this topic, because so security, particularly for women is a really important topic to understand.

Steve Altishin  
Oh, well, I'm sure we're gonna get to a lot of cool stuff today. And one thing that I was thinking of as I started to write this up was that, you know, there's people out there probably listening in their 30s, 40s. And, you know, they hear the term social security and they go, Well, what's this got to do with me? So my first question is, you know, why is this an important topic for everyone to understand?

Stacy Francis  
Yeah, I have to say, so security, if you're in your 30s, or 40s, a lot of people just kind of tuned out. But it actually can be extremely important and helping you make good decisions about your career, and also about how much you need to save for retirement. A lot of individuals, one of one person I spoke to recently, her entire career had been paid mostly in cash off the books. And so she went to go apply for her Social Security benefit now that she had, she's at full retirement age, and it was nearly non existent. She didn't plan for that she hasn't saved outside of security. So it's finding herself in a really difficult position. So the size of your earnings that you actually report to the IRS and you pay taxes on your earnings history is very important, because that is what is going to be considered when calculating your retirement benefits. But also for when you get married, if you're you pass away for your spouse for their surviving benefit, and even for your children, if you pass away when you have dependent children. So maximizing your earnings during your work years is really key.

Steve Altishin  
Oh, yeah. And you mentioned, which is when I think people went, Huh, which was it's you, and your spouse, it could be your children, it can be a lot of different people. So a lot of widows I know are unsure about eligibility criteria for Social Security benefits after their spouse passes away. So can we start by kind of breaking down the basics of the eligibility criteria?

Stacy Francis  
You know, so, when a person passes away who is, uh, you know eligible for Social Security, the surviving spouse most likely qualifies for what's called a survivor benefit. And Steve, it sounds very simple, right? But actually, it's really quite complex and often very poorly misunderstood. So the things you need to think about first is, Am I eligible, in order to be able to collect on your spouse's benefit for a survivor benefit, you need to have been married for at least nine months prior to their death. Most people can check that off, if you were divorced from that person, but had been married to them for 10 years, and not remarried, then check again, you most likely also are able to collect on their benefit. There's a catch though, that person who passed away needs to have worked and received 40 credits through the Social Security Administration, you get up to four credits a year for working so about 10 years of working experience, there is some variability for those people who are much younger for the younger workers that they may not have to have that full 40 credits. But those are the things you need to think about.

Steve Altishin  
Well I was going to say, so you don't have to be, and it's just a question that kind of pops up, you don't have to be 62 and a half or 65, or something like that, to collect survivor benefits?

Stacy Francis  
Correct. So the minimum age is age 60, you can collect as early as age 60. But you can also collect even sooner than that. If you have dependent children from with that spouse that are age 16 or below, you can also receive a benefit while they are continuing to be until they get to age 16. Other thing to know is that though the children are also potentially eligible for a benefit up to their age 18, or if they're disabled up to age 22.

Steve Altishin  
Is there a max on that? I mean, because I know there's maxes on maybe your benefit before you die, maybe and your spouse's benefit. And maybe I don't know, on your kids, but are there maxes on that, or a total max? 

Stacy Francis  
Oh, there is. So the government will calculate the maximum family benefit. And when they're looking at the maximum family benefit, they're looking at the benefit paid out to the parent, that parent who has children below age 16, as well as the dependent children. And usually, it's not a problem if you have one child, and the mom or the dad is receiving that benefit. But boy, whoa, is the parent that has more than one child, if they have to, if they have three children. And so what unfortunately will happen is that the total family benefit cannot be higher than 150 to 180 80 per 188% of the amount that would have been paid to the disease parent at their full retirement age. That's a lot of numbers. The Social Security Administration, your financial advisor can also help you to again calculate what is that total benefit for the whole family. But what we have found is because of these, you know, maximum numbers 150% 288% It's very rare for widows, with young children, you know, that are, you know, two, three or four children really to get that total amount that that when you just look at it, you know, you would expect for each person. 

Steve Altishin  
Yeah. Being a family law firm, we obviously deal in a lot of divorces, and remarriages. So what sprung to my mind is, does that maximum benefit include both spouses? Because you said that if you were divorced, you could still get spousal survivor benefits? And obviously, I guess, the new spouse would, Does does that figure into that total, both of them together? 

Stacy Francis  
So if there was the situation, let's say your spouse that you had been married to for more for 10 years or more, and you guys are divorced, you have not gotten remarried. That ex spouse passes away and you have children under age 16, you would be eligible for that benefit. Or even if you didn't have children under age 16, if your age 60 and above, again, not remarried, you would be eligible for that benefit. If your ex spouse got remarried, and had another 10 year marriage, that person also would be eligible. And the good thing is, is that the fact that more than one person is collecting on your ex spouses benefit in no way reduces what's payable to you. Or again, if there's dependent children, that you had with your spouse doesn't reduce what they're eligible for either.

Steve Altishin  
Got it. Maybe I'll just drop one in there, what happens if you do get remarried, and then your spouse dies, or you get remarried after your spouse dies, does that trigger something?

Stacy Francis  
So if the widow remarries before the age of 60, they normally lose their eligibility for the survivor benefits on their ex spouses record. So if their ex spouse that they've been married to was married to for 10 years passes away, and they've gotten remarried at let's say, age 58. You know, unfortunately, they're not going to be able to collect on their benefit, most likely. However, if she or he gets remarried, after age 60, they may be able to collect. Also, if the widow is caring for that deceased spouse child who is under age 16. That's another option that they can actually collect, even if they do get remarried.

Steve Altishin  
How about if the widow goes back to work? I'm sure that may have to happen because it's gonna be tight, initially, financially.

Stacy Francis  
Yeah. Yeah, Steve, this is a really frustrating topic for a lot of widows. And I just was speaking with an amazing, wonderful woman who has a six month old, her husband passed away a few months ago, unbelievably tragic story, we're looking at in her financial plan of her going back to work, and one of the most soul crushing pieces about that of not only having to go back to work, any dollars that she earns over about 21,000, then she's going to start to see her benefit or Survivor Benefit be reduced by the Social Security ministration. So the Social Security Administration is essentially going to take $1 from her benefit for every $2 She earns about that. $21,000. And so it, obviously, you know, that this is an issue, it essentially is penalizing widows for trying to take care of their families. It's something that I feel very strongly needs to be spoken about in finding some other ways, because the vast majority of parents do have to go back to work. And for a lot of them, they can be earning a certain amount where they don't even get benefits.

Steve Altishin  
Yeah. I mean you're putting money back into the system, and then being penalized.

Stacy Francis  
I know and Steve, then we're having this conversation of, do I stay home and collect the full benefit? Or, you know, do I go bust my my bottom and get it get a job? And yeah, there it really is. A difficult, a difficult situation, and you feel like you're being penalized for trying to take care of your family and financially.

Steve Altishin  
Yeah, and $21,240 isn't a whole lot of dollars, which, who No, no and kind of, you know, it's probably more money in maybe a rural or smaller town that doesn't have a tremendously high cost, but in San Francisco or New York City I mentioned, you know, that's, that's not going to get you very far.

Stacy Francis  
You know, it's not and a lot of people, they have a misconception of who widows are. They think of that person who might be in their 80s and beyond, but I have to tell you that we are seeing more and more widows being young. And the reality is, is that the average age of widowhood here in the United States, according the US Census Bureau, is is age 59. And many of the surviving parents have dependent children at home. You know, losing a spouse at any ages is devastating. But for a solo mom or solo father, who's now you know, struggling financially, to take care of their children, you know, so security imminent, when it is paid out is often extremely inadequate to really fill that gap to replace the lost earnings of that person who passed away.

Steve Altishin  
You know, in the old days, I shouldn't say in the old days, maybe in the old days, I'm old--

Stacy Francis  
Well it depends on how many days we're talking about.

Steve Altishin  
I like that. The kind of wrote advice for people, if one of the spouses was ill, or had some, you know, disability issues or things like that, was to be told, okay, you need to get divorced, because that will protect you from all those expenses. And you saw that a lot happening. But as we're talking today, I'm thinking, Well, hold on, there's a whole nother end of this, if you get divorced, you may be cutting yourself out of survivor benefits.

Stacy Francis  
Yeah, actually, Steve, you make a really good point. In the past, we have, and I still do see this as well. We call it a or I call it a medical divorce, when we tend to see this is someone, one of the spouses needs long term care support, and health insurance does not cover that. And that can be the tune of 10 to $15,000 a month in costs. And so they decide to get a divorce, to protect the assets of the other person. There are a lot of implications of all that, of course, talk to a lawyer. But if you are getting a divorce, you could be cutting off your potentially being able to get survivor benefits if your spouse passes away if your ex spouse passes away. And that is definitely the case if you have not been married for at least 10 years. So you know, these are all things to think about. You never want to do something without consulting in particular in that situation, a lawyer, and you would be consulting an elder law attorney, that's the person you would want to talk to. 

Steve Altishin  
Yep. Yep, absolutely. I'll give an example for me. I am just about to start collecting social security, and I waited until the very end. So I delayed, delayed delayed, and actually it you know, it's working for for us, but in the terms of the social security benefits, and survivorship benefits, are there any potential advantages to delaying benefits? 

Stacy Francis  
So there can be and there's there's two types of benefits that we're talking about. or talking about our, you know, retirement benefit that you would be eligible for based on your earnings throughout your career. So there's that or if your spouse has passed away the spousal survivor benefits, and, you know, for the spousal benefit. So looking at those two, there are some people that by looking at the benefits, they see that you know, what it makes sense for me to, you know, maybe collect on my benefit, and then switch to the survivor benefit at a later date. Other situations might be where it makes more sense to collect on the survivor benefit, and then switch to your own benefit at a later date. It's quite complicated. And again, a financial adviser, the Social Security office can also model these out for you. But what you did makes a lot of sense. So for your own benefit, your own benefit will continue to go up in value, the longer you wait, in fact, if you wait till age 70, you get the highest benefit possible. But with survivor benefits, you don't get any additional dollars by waiting till age seven Vendee, once you reach your full retirement age, it's not going to grow any larger. So yes, it makes sense for your benefit to grow to age 70. But once you're at your full retirement age, for a lot of people, that's age 66, waiting to collect under Survivor Benefit won't necessarily help you, it's not going to grow any larger. And also, there's some really cool software that's available that you know, financial advisors have that can actually really just show all these different benefits and what the optimal strategy is for collecting and which one is best to take at what time.

Steve Altishin  
I like that. I'm gonna interrupt this for one second, because it just made me realize, as you were talking, that maybe we should talk a little bit about your benefits, my benefits, versus my benefits as a spouse, versus my benefits as a survivor. Are my benefits somehow wrapped up in this equation of how much I can get for those other benefits. Or, you know, is there a boundary line there somewhere?

Stacy Francis  
Yeah, so something to know, you cannot generally collect both benefits, right. So even if you're eligible, you can't collect more than just one type of social economic benefit. At one time, there are three types of benefits I just spoke about to bail, talk about the third, and then I'll talk, I'll put them all in context. So the first that we talked about is your personal social security benefit. It's based on your earnings history. And as we mentioned, you know, the longer you wait to collect it, if you wait till age 70, you get the highest maximum benefit. So that's based on on your earnings history, to get a copy of what you're entitled to, you just go to SSA, Social Security Administration ssa.gov. And it gives you your work history and and also what you'll be eligible for at age 62, full retirement age and age 70. Alright, so the second one is spousal benefits spousal benefits is based on the earnings history of your spouse, and you if you are eligible for up to 50% of your spouse's maximum benefit at your full retirement age. And then the third benefit that we've talked about is the survivor benefit. That too, is based on your spouse's earning history. But you are eligible for that if your spouse unfortunately passes away, and instead of 50% of your spouse's, that benefit, you're eligible for 100% of that benefit. So these are all different options that are available to you. That's why kind of when I was talking about, you know, it sounds pretty straightforward. Your spouse passes away, you're eligible for spousal, sorry, you're eligible for Survivor Benefit. Fortunately, it's not quite as straightforward. Because again, you have your benefit. You have the survivor benefit and a lot of questions in between which one should I take, and when?

Steve Altishin  
One of the things I remember we talked about when we were getting ready was the problems with the system and trying to get them fixed. To your knowledge, is there anything in the works working on that?

Stacy Francis  
Yeah, there's something going on. So there are several proposals out there that if enacted, would boost benefits for spouse, surviving spouses. Biden has a proposal that would help survivors receiving a survivor benefit that if they've been collecting that for 20 years or more, they would get a bonus equal to 5%. And the thought process behind that is that if they've been collecting for many years, most likely they might have additional medical expenses. But, Steve, I think the challenge is, is that whether or not Congress is going to agree to this, it's really anyone's guess. I was just on Capitol Hill for international widows day. A few weeks ago, talking about the challenges widows and widowers faced, in particular, those with dependent children and how the Social Security Administration is really failing them and and how they're really suffering financially. These stories that you hear are absolutely heartbreaking. But Steve, the challenge Is, is that, you know, the Social Security Administration, and the dollars in the fund to support, you know, millions and millions of claimants, it's really not enough. Over the last couple years, we've seen increases in benefits being paid out. And while that sounds great, the reason those benefits were paid out, is truly because of the wild inflation numbers that that we've seen. And so there were, you know, some people saw their their benefits increased by as much as 8%. Over this last year, which is great. But even that 8.7 cost of living adjustment or cola really wasn't enough for families that have been struggling. While that adjustment is lovely, what's ended up happening is that it's now taxing the Social Security, administration funding even more so. Meaning that the entire system is even in a more financially precarious position than it was a few years ago.

Steve Altishin  
Do you have some advice for-- and this went by fast, so fast. But I'm wondering what advice you might give to the widows out there who are struggling, or maybe people who are even not aware that they're vulnerable, that they're going to be vulnerable. Just because, if it's not also by social security, there's got to be some other ways they can help themselves.

Stacy Francis  
And I'm going to talk about before losing a spouse, a partner, and then after, before the loss of a spouse, if you're in that situation, doesn't matter how healthy they are, you are get life insurance on yourself, it's wicked cheap, you can get a million dollar policy for literally, you know, cents cents on the dollar, it's the best thing you can do tell your family that you love them. So much of these problems would have been completely erased if these families had the proper amount of life insurance. So that's number one. Number two, if your spouse has passed away, the most important thing you can do is to get the right advice. Millions of dollars are left on the table, because people are not understanding these benefits, and not understanding how to coordinate them. Right. And so the Social Security Administration, but also a very good financial adviser that has expertise in this area. Very important. Because the more you understand, the more informed you are, the better decisions are going to be able to make about your financial future. And a big piece is what is that social security benefit, and making sure that you're maximizing it.

Steve Altishin  
Yeah, I mean, I don't know this, but I would imagine if you have the option between taking two different ones, as you can, like you talked about, you have to tell them? I mean--

Stacy Francis  
You do, yeah. I mean that. Yeah. And the other thing I will say to most of the professionals at the Social Security Administration office that I have spoken to have been very knowledgeable. But I have had situations where the answer I get I'm not so sure about. So this is my advice. If you reach out to the Social Security Administration, whether you're going to the office or you're making a phone call, write down every single word that they say, as far as the answers to your questions, then call back, or then go back to the office again, at a different date. And make sure that you are getting word for word, that same exact advice and answer because I have found some times it deferring and saying okay, wait here. Yeah. You know, and again, you don't want to be leaving, you know, 1000s, if not 10s of 1000s of dollars on the table.

Steve Altishin  
Oh my gosh, oh, wow. We blew through this. But as you said, Good advice. So if anyone wants to contact you, and I'm sure there are people who are going to, how can they get a hold of you?

Stacy Francis  
Yeah, so you can reach out to me directly. At Stacy S T A C Y at francisfinancial.com. You can also visit our website we have some great information on social security and retirement at www. francisfinancial.com. And I also created a beautiful charity in honor of my grandmother called Savvy Ladies and savvyladies.org, you'll see that there are hundreds and hundreds of courses that you can take. And quite a few of them are specifically about this topic of retirement and social security. So a lot of great resources to be able to continue the learning and the understanding.

Steve Altishin  
Oh, I love it. You were a great recess-- recess?!

Stacy Francis  
Resource! I know how it is by the late in the day, my mouse starts to write

Steve Altishin  
Well you know, all this social security stuff is so difficult and so obtuse and you were able to make it understandable, even to someone like me. And that's not easy. So thank you very much.

Stacy Francis  
Well, thank you, and congratulations on collecting Social Security. I know you have worked very hard for it. Very hard for it.

Steve Altishin  
Well, well done. Oh my gosh, and everyone else. Thank you for joining us today. If anyone has further questions at all, you can also post it here, and we can help get you connected with Stacey. And until next time, stay safe, stay happy and be well.

Outro:
This has been Modern Family Matters, a legal podcast focusing on providing real answers and direction for individuals and families. Our podcast is sponsored by Pacific Cascade Legal, serving families in Oregon and Washington. If you are in need of legal counsel or have additional questions about a family law matter important to you, please visit our websites at pacificcascadelegal.com or pacificcascadefamilylaw.com. You can also call our headquarters at (503) 227-0200 to schedule a case evaluation with one of our seasoned attorneys. Modern Family Matters, advocating for your better tomorrow and offering legal solutions important to the modern family.