Planning for retirement can present unique challenges for singles. And when to take Social Security benefits can be among the more confusing conundrums. But whether you are never married, divorced or are a widow, there are strategies in place to help make your life in retirement a quality one. even without the moral and financial support of a partner. Fidelity Viewpoints listed four tips to take advantage of if you have a life-changing event.
A financial advisor could help you create a financial plan to protect your investments and identify new opportunities to make money.
Tip 1: Wait Longer to Take Social Security Benefits
Waiting out to take your Social Security benefits has long-term financial benefits. When you reach the age of 62, you can receive Social Security benefits but it won’t be the full amount.
However, if you claim your Social Security benefits once you’ve reached full retirement age (FRA) — between the ages of 65 and 67, depending on your birth date — you are eligible for the full amount. If you choose to delay receiving your benefits, the monthly amount will increase until you are 70 years old.
Tip 2: Your Former Spouse’s Work History Can Impact Benefits
If you are divorced, it’s possible you could earn higher Social Security benefits based on your spouse’s work history if he or she earned more wages than you. Ask the Social Security Administration (SSA) to confirm. In order to be eligible for high payments, the following rules also apply:
- You can’t be married currently.
- Both you and your ex-spouse need to be at least 62 years old before you can claim the person as an ex-spouse.
- You and your ex-spouse need to have been divorced for at least two years. If that isn’t the case, your ex-spouse needs to be currently claiming Social Security benefits.
- You and your ex-spouse had to have been married for 10 straight years or longer. It still applies, even if the marriage ended 30 years ago.
Tip 3: If You are Widowed, Evaluate the Benefits From Your Late Spouse
You are eligible to collect your late spouse’s Social Security benefits as a survivor benefit. The FRA rule applies here as well. If you wait to receive the FRA, you will receive all of the Social Security benefits. The benefits will be reduced if you look to receive it before the FRA.
And you also have the option two switch between your personal monthly benefits and your late spouse’s. You can do this effectively by choosing which payment is larger. And a key factor here is your choice is not permanent. For example, if you choose to take survivor benefits while allowing your personal Social Security benefits to grow until age 70, that can work out for you.
You could also choose to claim your Social Security benefits first and switch to survivor benefits at a later date. It’s not uncommon for late spouses to have higher benefits after they pass away. But the benefits for your late spouse increase until you personally reach the FRA. If you are younger than the FRA currently, choosing this option may work for you.
Tip 4: Evaluate All of Your Income
If you’re single, don’t put all of your eggs in one basket with Social Security benefits. Consider all of your income streams first. If you have pensions, annuities and investments from other resources, factor those in first and receive payments from them however it’s beneficial to you.
And if you have assistance from your family, that makes it better for you to possibly hold off on your pensions, annuities, and investments. Getting contributions from all of those sources allows you to delay and maximize your Social Security Benefits until reach 70 years old. And by age 70, you can find yourself receiving multiple streams of income to help you live comfortably in retirement.
Bottom Line
Planning for retirement is never easy, especially if you’re single. But there are options available if you were never married, are a widow or are divorced. Making sure that you maximize your Social Security benefits through your FRA is important. And if you are able to wait until you’re 70 years old to receive your Social Security benefits, the amount will reach its max.
Financial Advisor Tips
- Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now
- If you’re just starting to invest, working with a robo-advisor may be helpful. Robo-advisors offer portfolio management services just like traditional financial advisors, but they typically have lower fees and account minimums. Here are the top 10 robo-advisors.
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