Social Security Spousal Benefits Part 3: Restrict the Scope Strategy

As we continue our series on Social Security, we'll next look at a strategy referred to as "Restrict the Scope."  It is recommended you first read our posts on Social Security, Spousal Benefits and File and Suspend before continuing.

As with File and Suspend, Restrict the Scope refers to a filing strategy used by married couples to maximize their Social Security benefits.  It is often mentioned when both spouses have similar earnings records, but has many more practical applications.  In fact, Restrict the Scope is generally much more utilized than File and Suspend.

To review, briefly, everyone is entitled to a Social Security benefit based on their own earnings record.  As a spouse, you are also entitled to benefits based on your partner's earnings record equal to a maximum of 50% of their Primary Insurance Amount (PIA).  Simply put, you receive the greater of your benefit or the Spousal Benefit, but not both.  Your spouse must file for Social Security themselves in order for you to receive Spousal Benefits.

Social Security Spousal Benefits Part 2: File & Suspend Strategy

In our recent posts, we've provided some basics on Social Security and Spousal Benefits.  Armed with that information, let's start taking a simple look at some strategies that may allow married couples to more effectively maximize their lifetime Social Security benefits.  We'll begin with a strategy often called "File and Suspend." (If you haven't read the previous posts, you are encouraged to do so first before reading on.)

As we’ve already noted, you are always entitled to a Social Security benefit based on your own earnings record. As a spouse, you are also entitled to a benefit based on your partner’s earnings record, up to half of their Primary Insurance Amount (PIA), called a Spousal Benefit. (You receive the greater of your own benefit or half of your spouse’s, but not both.) However, in order for you to receive a Spousal Benefit, your spouse must have filed for Social Security benefits themselves. (Note: This is not the case when claiming on an ex-Spouse, but that’s a topic for another post.)

Credit Reports and Credit Scores – What You Need to Know

We all know the importance of a good credit score.  Many people consider their credit report to be their financial report card.  Whether you’re buying a new car, sending your child to college or applying for a credit card, your lender has a responsibility to evaluate the risk they’re taking by lending to you.  But what exactly does that mean and how can you find your credit report and credit score? 

Your credit report is a detailed description of how you have managed your credit in the past 7-10 years.  The better your credit report, the more likely your credit requests will be approved and you’ll receive lower interest rates.  Organizations known as credit bureaus or credit agencies, gather information from employers, landlords, public records and creditors in order to generate these reports.  The major credit bureaus in the U.S. include Equifax, Experian and TransUnion.  After compiling this information, these credit bureaus then sell your credit information to anyone who has a legitimate need to access the information (prospective creditor, landlord, employer, insurer, etc.).

Social Security Spousal Benefits - Part 1

The more frequently we discuss Social Security with our clients - which is often - the more we realize just how complicated Social Security can be.  In particular, we have found that Spousal Benefits can be among the most confusing provisions in the Social Security system.

While you should not expect to understand Spousal Benefits fully after only a short reading, we do hope to shed at least a little more light on the topic.  First, let's see how the Social Security Administration explains it:

"Even if you have never worked under Social Security, you may be able to get spouse's retirement benefits if you are at least 62 years of age and your spouse or ex-spouse is receiving or eligible for retirement or disability benefits.

If you begin receiving benefits at your full retirement age, your benefit can be equal to one-half of your spouse's full retirement amount."

(http://www.ssa.gov/retire2/applying6.htm#a0=0)

Joint Tenants with Rights of Survivorship vs. Tenants in Common

There’s a common saying that it’s the little things that make the biggest difference. That is clearly illustrated in this discussion of “tenants in common” and “joint tenants with rights of survivorship.”

What are tenants in common (TIC) and joint tenants with rights of survivorship (JTWROS), and when do they apply?

When two or more people own a property or asset, such as a stock, each individual owns a share (or interest) of the whole, either as joint tenants or tenants in common.