Tag Archives: social security benefits

Ready to retire? Don’t rush your Social Security start date

My Comments: A major determinant for when you should start taking your Social Security benefits comes down to when you plan to die. If you plan to die soon, then start the payments as early as possible; if you plan to live to be 100, and have enough money now, then delay the start of payments as long as possible.

March 31, 2016

For most Americans, Social Security is a big part of their retirement income

An estimated 91% of Americans aged 65 or older receive Social Security benefits—the average annual benefit for a retiree is about $16,000. For most of these retirees (64%), Social Security represents a significant portion of their income. Even for affluent retirees (those aged 60–79 with at least $100,000 in financial assets), Social Security accounts for 29% of total retirement income, on average. Given that Social Security provides a base level of guaranteed income for most retirees, it’s an important benefit for investors and their advisors to consider when designing a comprehensive plan for retirement income.

By delaying Social Security, retirees can stretch their savings

In the past, the decision as to the “right” time to claim Social Security has often been based on a break-even analysis of a retiree’s expected benefits versus his or her life expectancy. That approach, however, ignores two key features of Social Security, namely: Once you start receiving it, it’s paid for the rest of your life, no matter how long you live, and is adjusted upward for inflation. A big concern for most retirees is the risk of outliving their savings.

For many retirees who can afford to do so, deferring Social Security for a few years (even past their “full retirement age”—defined by Social Security according to one’s birth year—to the maximum annual benefit at age 70) greatly increases their lifetime monthly benefit. Given that at age 65, more than 50% of women can expect to live past age 88 (and 50% of men past 85), delaying Social Security can provide powerful longevity protection.

Social Security acts like an inflation-protected annuity

The act of delaying the claiming of Social Security is analogous to purchasing an inflation-protected deferred income annuity. Benefits increase by up to 8% in real terms for every year that claiming is delayed. The chart below  demonstrates the effectiveness of a deferred claiming strategy both for increasing guaranteed income and for providing longevity protection. Also, in the case of a married couple, one of whom, for instance, delays claiming until age 70 (for maximum benefit), a surviving spouse receives the larger of the two Social Security benefits—thus further demonstrating Social Security’s role in protecting lifetime income.

Thoughtful claiming strategies can help retirees make the most of their benefits

A careful review of Social Security regulations, your financial situation, and any health considerations you may have are crucial to developing a strategy to maximize income during retirement. (Note that the regulations can be complex, and you may benefit from seeking professional advice.) For individuals in poor health or with little or no other financial resources, early Social Security claiming may be appropriate, but for most retirees, the increase in guaranteed income gained by deferring Social Security makes waiting to start benefits an appropriate strategy. The accompanying chart shows the potential impact on a couple’s lifetime Social Security income of three different approaches: both spouses claiming at 62 (the earliest possible age), a hybrid strategy where one spouse claims at age 62 while the other delays until age 70, or both spouses delaying until age 70 to accumulate the maximum amount of delayed retirement credits.

Do the recent changes in Social Security rules allow you to file and suspend?

Social Security cardMy Comments: A critical date is fast approaching for those of you who have not yet signed up to receive your Social Security benefits, for one reason or another.

This writer clearly knows his stuff and if you have questions of me, I’ll do my best to answer them. None of this may apply to you but if you think it does, find out soon. You only have a few days left.

Click on the image above and it’ll take you to the article.

BY Laurence Kotlikoff  April 11, 2016

 

Can I File and Suspend My Social Security Benefits?

SSA-image-2My Comments: This is a hot topic. No one likes to leave money laying on the table. Given the chance you will live longer than expected and don’t have the financial reserves you thought you might have, taking advantage of everything possible from the Social Security system is critical for many of us.

By Dan Caplinger Published April 10, 2016

Social Security has many complex provisions, and smart retirees have used some of those provisions over the years to create useful strategies to enhance their retirement income. One of those strategies is called file and suspend, and late last year, lawmakers identified the strategy as offering a loophole that they didn’t want to leave open. As a result, the file-and-suspend strategy will disappear soon, but there’s still an opportunity for some people to take advantage of the strategy before it goes away.

How the file-and-suspend strategy works

The idea behind using the file-and-suspend strategy was relatively simple. Under the laws governing Social Security, your spouse isn’t entitled to receive any spousal benefits based on your work history until you decide to file for your own retirement benefits. This isn’t a problem as long as you want to take your benefits now. However, many people would prefer to defer taking retirement benefits until a later date, letting them earn delayed retirement credits and boost their eventual monthly payments.

The file-and-suspend strategy allowed couples to get the best of both worlds. Under the filing part of the strategy, you would file for your benefits, thereby activating spousal benefits for your spouse. However, you would then immediately suspend your retirement benefits. The old rules allowed you to keep earning delayed retirement credits during the period of suspension. The net result was that one spouse could get benefits now, and the other could wait and get larger benefit checks later.

Why the file-and-suspend strategy is going away

Late last fall, lawmakers agreed to do away with the file-and-suspend strategy, characterizing it as an unintended loophole. Once the law goes into effect, if you suspend your benefits, your spouse will no longer be able to get spousal benefits based on your work history. That means that in order to activate spousal benefits, you’ll have to file and actually receive your retirement benefits, and you won’t be able to earn delayed retirement credits once you file.

The law’s effective date was set for six months after its passage. That works out to May 1, and because that’s a Sunday, most planners are recommending that people take action by April 29.

The problem is that you’re not eligible to file and suspend until you reach full retirement age, which is currently 66. Those who won’t have turned 66 by the late-April deadline therefore won’t have any opportunity to get the benefits of the file-and-suspend strategy.

However, if you are eligible, then you’ll be able to enjoy the advantages of filing and suspending even after the effective date of the law. Grandfathering provisions will allow your spouse to receive spousal benefits even if you’ve suspended your benefits — as long as you did so before the deadline. If you decide to unsuspend your benefits after the deadline, then that’s a one-time decision, and you won’t be able to unmake it.

What you can still use file and suspend for

Even after the new law takes effect, there are still situations in which filing and suspending benefits can make sense. The most common is if you filed for early benefits and later decide that you would prefer to have largely monthly payments, you can suspend those benefits once you reach full retirement age. You can then earn delayed retirement credits that will boost your benefit when you decide to start taking it again. Given that many people regret their decision to take early Social Security, this is an option that has some value.

Still, the main reason why most people used file and suspend will no longer work once May comes. At that point, the strategy will simply be the latest in a series of things people did to enhance their retirement income.

Grab This Social Security Benefit While You Still Can

My Comments: Social Security has for many years been a critical financial component in the lives of almost every citizen of the US who is aged 62 or older. I know it is for me and my wife.

Changes are going to happen to help maintain it’s viability as the population demographics change and society evolves. What you read below may confuse you, but if some of the variables described apply to you, you need to understand this rule change as it could mean lots of money for you, both good and bad.

Philip Moeller February 18,2016

Q: I plan to file for Social Security in November 2016. I will turn 66 on November 24, 2016, and my wife will turn 66 on February 24, 2017. We had planned to have my wife file a restricted application for Social Security as of February 2017 and, at age 70, switch to her retirement benefit. In consideration of changes to the law, will this option still be available to us as of February 2017? — Ken

A: Yes, this strategy will still be valid under the new law. Because your wife was already 62 at the start of 2016, she is grandfathered under the new regulations. Once you’ve filed for your benefit, she will be able at her full retirement age (FRA) to file a restricted application just for her spousal benefit and then at age 70 file for her own retirement benefit. Assuming it will be larger than her spousal benefit, she should receive an additional payment that is roughly equal to the amount by which her retirement benefit exceeds her spousal benefit.

Under the old rules, you would have been able to file and suspend at your FRA. That would have permitted her to file a restricted application and allowed both of you to defer your own retirement benefits and thus earn delayed retirement credits. The ability to file and suspend will no longer be provided to people who have not reached full retirement age by the end of April (April 29, to be exact, which is the last business day of the month).
SSA-image-2
These new changes add yet another layer of complexity to what was already a challenging set of Social Security claiming decisions. And wishing the system were simpler won’t make it so. Still, by asking the right questions, as Ken has done, it’s still possible to arrive at the best outcome.

The ‘Retirement Crisis’ That Isn’t

retirement_roadMy Comments: Social security payments to my wife and I are a critical element of the life we live. It can be argued that without those payments, we’d have scaled back in terms of what we spend for food and housing. The fact remains that given expectations of a monthly income from that source, our life is what it is.

That money does not disappear down a rat hole. It’s used to buy things and as such, it flows into the economy of Gainesville, Florida to a large extent. The same can be said of every household in the US that receives social security payments. Those dollars contribute to the gross national product of this country, and can be considered essential to the accumulating retirement accounts that will allow the next generation to retire with dignity.

You should read this in the context of what it would take to increase the viability of future social security payments beyond the currently expected ‘crisis’ date of 2033. See my EARLIER POST on this topic.

By Andrew G. Biggs December 29, 2015

Ask pretty much anyone and they’ll tell you: Americans are undersaving for retirement. It’s not just thought to be a few households falling through the cracks. Rather, there’s a perception that, after a “golden age” of traditional pensions that lasted from World War II until about 1970, most Americans won’t have nearly enough income in retirement to maintain their pre-retirement standards of living. Financial writer Jane Bryant Quinn states the view succinctly: “America’s retirement savings system has failed.” All the Democratic presidential candidates have proposed expanding Social Security benefits to address this “retirement crisis.”

But new data shed light on America’s retirement system, both how it compares with the systems in other countries and how retirement savings are developing over time. The results may surprise you.

On Dec. 1, the Organization for Economic Cooperation and Development (OECD) updated its Pensions at a Glance survey of retirement saving in more than 30 countries. The United States’ Social Security program is indeed less generous than most OECD countries’ plans. Americans who earn the average wage each year of their careers will receive Social Security benefits equal to about 35 percent of the current average U.S. income. Note that comparing a country’s retirement benefits with that country’s current average income is different from a “replacement rate” that compares retirees’ benefits with their own pre-retirement earnings. Nevertheless, these data show that while Social Security is comparable to retirement programs in Britain (30 percent) and Canada (33 percent), it’s still below the OECD average of 53 percent.

But retirement income security is about more than just government benefits. It also includes private retirement saving and work in retirement, where the United States does very well. The total incomes of Americans age 65 or older are equal to 92 percent of the national average income, according to the OECD. The United States ranks 10th out of 32 OECD countries and above countries such as Sweden (86 percent), Germany (87 percent) and Denmark (77 percent). In absolute dollar terms, U.S. seniors have the second-highest average incomes in the world, behind tiny Luxembourg.

But what about working-age Americans? Hasn’t their retirement saving fallen? Using Federal Reserve and Social Security Administration data, I tallied the total assets Americans have built for retirement, including 401(k) and Individual Retirement Account balances and benefits accrued under traditional pensions and Social Security. As of 1996, the first year for which full data are available, Americans’ total retirement assets were equal to 2.7 times total personal incomes. By early 2015, retirement assets had risen to 4.1 times personal incomes.

In fact, the historical shift from traditional pensions to 401(k) plans has not reduced retirement saving, Boston College’s Center for Retirement Research recently concluded. It’s true that with 401(k)s, workers themselves bear the risks related to how their retirement funds are invested. But retirement saving is more widespread: More Americans have retirement plans today than did during the “golden age.” And unlike with traditional pensions, which pay a decent benefit only to long-term employees, members of America’s mobile workforce can carry their 401(k) plans with them as they change jobs.

Are some Americans falling short? Unquestionably, and retirement policy needs to help them. For instance, unmarried, less-educated women are far less likely to be financially prepared for retirement, in part because many fail to meet Social Security’s 10-year vesting period to qualify for benefits. Paying a universal minimum benefit to all retirees, which Social Security doesn’t currently do, would reduce old-age poverty caused by short working careers.

Likewise, many small businesses don’t offer 401(k) plans, due to the high fixed costs of establishing the plans. “Starter 401(k)s” with lower regulatory costs or multiple-employer 401(k)s could make offering retirement plans more affordable.

But massive Social Security expansions are unnecessary and unaffordable. Unnecessary because, as the OECD data show, when government retirement programs offer more generous benefits, households do less to prepare for retirement. On average, for each dollar of additional retirement benefits paid by an OECD government, households in that country generate 82 cents less in income through personal saving or work in retirement. Across-the-board benefit hikes would almost certainly result in lower retirement saving by middle- and upper-income households, which receive most of the benefit increases under expansion plans such as those proposed by Democratic presidential candidate Bernie Sanders.

Benefit expansions are also unaffordable. While the Democratic presidential candidates have promised expanded Social Security benefits, none have proposed plans that would enable Social Security to pay for the benefits it already has promised. That’s important, since Social Security’s long-term funding shortfall rose by 58 percent from 2008 to 2015.

The data show that the biggest retirement danger isn’t that Americans haven’t saved enough. It is politicians, both past and present, who promise Social Security benefits without paying for them. That’s the true retirement crisis the presidential candidates need to address.

Andrew G. Biggs, a resident scholar at the American Enterprise Institute, was principal deputy commissioner of the Social Security Administration from 2007 to 2008. He served on the Society of Actuaries’ Blue Ribbon Panel on Public Pension Plan Funding from 2013 to 2014.

Everything You Need to Know About Social Security

retirement-exit-2My Comments: The monthly income my wife and I get from SSA is a significant part of our financial freedom. We paid into the system for 50 plus years and while I like to think I’m just getting my money back, it’s really much more than that.

As a financial planner and investment advisor for the past 40 years, arguments that I could have done much better had I been given a choice to invest it myself fall on deaf ears. Of the several hundred clients I’ve had, virtually NONE of them had the necessary discipline to save enough on their own, much less invest successfully. All these arguments are offered by those who have not yet reached retirement age.

For every retired person who has enough to maintain their standard of living without Social Security, I’ll wager there are several hundred who can’t. It’s not just a matter of skill; luck and timing are equally, if not more, critical to financial success. (that’s for another blog post someday)
Yes, there are existential threats that need to be addressed. But I suspect they will be addressed though perhaps not in my lifetime. Unless you plan to die before you retire, you need to know and understand Social Security.

Kristin Wong 10/21/15

If you pay taxes and you plan on retiring in your golden years, you should probably know a thing or two about Social Security. No doubt you’ve heard of it, maybe in the context of politicians yelling about how to fix it. But why is it broken in the first place, and what exactly is it all about? We’ve got your answers right here.

What Is Social Security?
In the U.S., Social Security is a government benefit dedicated to three general groups of people: retirees, families of disabled or deceased workers, and people with disabilities.

When you get a paycheck, you’ve probably noticed a little cash going to something called FICA. This is the Federal Insurance Contributions Act tax, and it’s what funds Social Security. Your money goes into a pot, and current Social Security recipients (your grandparents, perhaps?) are paid from that pot. When it’s time for you to retire, your benefits will come from the same pot, which will be funded by future generations who pay taxes (maybe your grandchildren!)

The pot is made up of two different trust funds: the Old-Age and Survivors Insurance (OASI) fund and the Disability Insurance (DI) trust fund. When the money coming into the pot exceeds the amount they need to give out, the Social Security Administration (SSA) has a surplus. That money earns interest, the same way you might save your extra money at a bank. Meanwhile, the government is allowed to use that money, the same way your bank might use your savings for loans.

What Happens When You’re Eligible
When you reach your 60s, you’ll probably start thinking about retiring. That means applying for Social Security as a source of retirement income. Hopefully it’s not your only source, though. Ideally, you’ll have been saving money over years and years to fund your retirement—whether through an employer-sponsored 401(k) plan or an Individual Retirement Account. You may also have a pension.

But Social Security can be a helpful addition to your retirement income. The maximum benefit for Social Security is $2,663, which isn’t much, and most people are eligible for even less than that. How much cash you’re actually eligible for will depend on a few different factors:
• Your age: You can start receiving social security as early as 62, but actual “full retirement age” is 65 (or older, you can check your own retirement age here) If you retire before that time, your monthly benefits could be reduced by up to 25% for the rest of your life. This makes sense, because you’re getting money earlier—so it’s the same amount, just reduced because it’s spread out over a slightly longer period. Similarly, if you retire after your full retirement age, you could get 8 percent more until age 70.
• Your wage over the years: The Social Security Administration takes the 35 years that you earned the highest income to calculate something called your Average Indexed Monthly Earnings (AIME). From there, they use a formula based on that number to decide how much you’ll be paid.
• Whether you worked for the government: If you worked for the government and received a pension, the SSA uses a different formula to calculate your benefit.
The SSA has a useful calculator to help estimate what your retirement payments will be. You can also get an estimate of future earnings by signing up at the My Social Security website.
Here are the average monthly Social Security benefits as of July 2015, according to the SSA:
• $1,336/month for retired workers;
• $1,282/month for widows or widowers over age 60;
• $1,165/month for disabled workers;
• $1,979/month for a disabled worker, spouse and one or more young children;
• $2,631/month for a widowed mother and two children.

If you’re ready to start receiving payments, whether it’s for retirement, disability, or survivor’s benefits, you can start by calling the SSA, visiting an office, or applying online. The SSA offers pretty straightforward instructions here.

The Real Problem with Social Security

You’ve probably heard that Social Security is doomed, and we’re going to completely run out of Social Security money within the next couple of decades and you’ll get screwed out of your benefits. This is actually untrue. However, it doesn’t mean things are completely rosy, either.

Another common misconception is that the government keeps borrowing money from the Social Security fund, which is causing us to run out. That’s not the problem either.

The problem is simple: we have more going out of Social Security than we do coming in.

Social security, in theory, is a great idea: you pay taxes now to ensure your retirement later. The problem is, it doesn’t work out that neatly in practice because the money you pay goes to an entirely different generation—it doesn’t come directly back to you. The Baby Boomer generation is retiring now, which means we have a lot of retirees, and thus are paying out a lot of money in Social Security. At the same time, we have fewer workers paying taxes and funding Social Security. So, we have less money coming in than going out: Investopedia calls it a declining “worker-to-beneficiary” ratio. It isn’t a problem right this second, because we have a surplus, but that surplus is running out.

When you hear news about Social Security funds being “depleted,” it doesn’t mean Social Security itself is crumbling and the sky is falling. It just means we’ll run out of that surplus money—money in the piggy bank, if you will. People are still paying Social Security taxes, so we still have money coming in. But it isn’t enough, so if we stay the course where Social Security is headed, future generations won’t get as much money.

For example, the piggy bank for Disability Insurance is projected to be depleted by next year. According to the SSA:
The Trustees continue to project depletion of the Social Security Disability Insurance (DI) Trust Fund in late 2016 if lawmakers take no action. This impending DI funding shortfall, which threatens beneficiaries with sudden and substantial benefit reductions, is but the first manifestation of larger financial imbalances facing Social Security as a whole as well as Medicare.

Once that fund is empty, incoming taxes will only cover about 81 percent of people who are scheduled to receive payments. And you can’t just not pay an entire percentage of people, so to address the problem, the SSA will have to automatically cut everyone’s disability benefits by 19 percent.

And that’s just disability. The rest of Social Security’s piggy bank is expected to be empty by 2034. This doesn’t mean they’ll stop paying benefits, but it does mean everyone will get less. If we stay this course, we can probably expect around 20% in cuts, according to the Motley Fool:
If Congress can’t come to a long-term solution that involves raising additional revenue and/or cutting expenses, benefits for eligible beneficiaries will be cut by 23%. That’s a big problem, and it has seniors and pre-retirees concerned.

Considering the majority of retirees get half or more of their income from Social Security, that’s a huge cut to contend with.

What the Government Is Doing About It
Politicians have all kinds of ideas on how to fix Social Security, but they all boil down to either increasing taxes or reducing benefits. You can browse OnTheIssues to see where any given politician stands, but most ideas fall into one of those two broad categories.

There’s currently a cap the amount of Social Security taxes taxpayers have to fork over. For 2015, the maximum amount of taxable earnings is $118,500, meaning if you earn more than that, you’re only taxed on the first $118.500. A lot of politicians talk about raising this amount, but The Commission to Modernize Social Security wants to get rid of the cap altogether. Member Maya Rockeymoore tells Bankrate that while most of us have seen pretty stagnant wage increases over the past few years, the earnings for the top two percent of wealthiest taxpayers have increased dramatically. By eliminating the cap altogether, high earners would be taxed more on Social Security.

On the other side of the coin, you could raise the retirement age. It would still reduce the full amount of benefits, since you’re postponing retirement, but it doesn’t require a tax increase. We’re already on course to raise the retirement age for future generations to 67 by 2027. One group, the Business Roundtable, wants to increase the age even further to 70.

How to Make Sure You Have Enough to Retire

You’re still going to get some Social Security money, but whether or not it’s enough to fund your retirement is a whole other story. Right now, benefits average about $1,300 a month, so even if that number doesn’t get cut down, it’s not like you’re going to be living it up in Paris on Social Security checks alone.

Your best bet is to safeguard your own retirement with your personal savings. That’s easier said than done, but it’s more reliable than trusting politicians to figure it out. The more you save (and the earlier you start!), the better off you’ll be. To get started, you’ll want to:
• Make sure you’re taking advantage of your employer’s 401(k) match
• Look into opening an IRA
• Learn how to build a basic “set and forget” investment portfolio

In short, the sky is not necessarily falling and Social Security won’t be completely gone by the time younger generations retire. But we may not get as much money as we expect, so it helps to understand what the issue really is, how it’s being fixed, and in the meantime, do what you can to beef up your own savings.

Useful links to more information:

http://lifehacker.com/5893900/double-your-investments-guaranteed-why-you-shouldnt-pass-up-employer-matching

http://twocents.lifehacker.com/a-beginner-s-guide-to-opening-an-ira-1607498930

http://twocents.lifehacker.com/how-to-build-an-easy-beginner-set-and-forget-investm-1686878594

Social Security Mistakes That Can Be Fixed

Social SecurityMy Comments: With so many of us soon to retire, and the not so obvious complexity of Social Security, there comes a time for many when decisions made ask for a redo. Some are possible and this short article describes some of them. If you have yet to claim benefits or are less than 12 months into the system, you will want to read this.

by Dave Lindorff JUL 23, 2015

They say you can’t fix the past, but when it comes to Social Security, sometimes you can.

Granted, it used to be easier. Until December 2010, if clients had begun collecting benefits at 62 and then decided it was a mistake, they could fix it by simply repaying all the benefits already received, even if it was six or seven years later. Filers didn’t even have to pay interest on all the money they’d received — a situation that had some advisors actually recommending this as an interest-free loan strategy. But Congress eventually closed the loophole.

PENALTY-FREE REVERSAL

Now, a client who retires and claims benefits at 62 can still reverse that decision within 12 months, repaying the benefits received without penalty and then waiting longer in order to get higher benefits. But after 12 months, this is no longer allowed.

The 12-month window is good news, though, because as Alicia Munnell, director of the Boston College Center for Retirement Research, notes, while many of those who file early may have to if they have no savings and no other source of income, many others, including clients who may come to see you, simply filed at 62 because they mistakenly think “if you retire from your job you should file for your benefits.”

Munnell argues that can be a costly mistake for those who have other options — whether it’s working longer or tapping savings. Waiting until the so-called “full retirement age” of 66 (for those born before 1960), will increase one’s benefits by a third. In other words, someone who would only receive $750 a month at age 62 would get $1,000 per month for life by waiting until age 66 to file. Waiting another four years to the maximum age of 70 for filing would add another 8% per annum to that amount, bringing the benefit in that example to $1,320 a month in constant dollars.

UNDOING FILE & SUSPEND

But there are several other situations where Social Security allows a redo.

One involves the “file-and-suspend” option. This is where a married couple with two earners opts to have one spouse, usually the higher earner, file for benefits at full retirement age but then suspend those benefits until age 70. This move allows the other spouse to start collecting spousal benefits on the first spouse’s account, while leaving his or her own account to continue growing untouched until age 70, when the benefit is maximized.
But if the person who filed and suspended has a change in circumstances — say a case of terminal cancer or sudden unanticipated expenses — they can still make changes. In that event, the person can cancel the file-and-suspend and Social Security will pay out all the foregone benefits as a lump sum, calculated at the benefit level the individual would have received them beginning at age 66 (there would be no interest paid). Of course, going forward, this person would receive benefits based on her or his age at the time the file-and-suspend was cancelled.

REDOING SPOUSAL BENEFITS

Another area where a client can redo a Social Security decision is spousal benefits. The spousal benefit, for someone who begins taking it at 66, is 50% of what the spouse whose account is used is receiving. For example, if a husband at 66 is eligible for $2,000 per month and files and suspends benefits, his wife, also 66, could start collecting a spousal benefit of $1,000.

But say the wife was already eligible to receive $1,500 on her own account by that time and was just leaving that untouched to let it grow to the age 70 level. A year later, the couple might decide they need that extra money to live on, which by then would be 8% higher, or $1,620 per month. At that point, or at any time before reaching 70, the wife could simply cancel her spousal benefit and switch over to her own account.

Finally, for those who’ve married and divorced more than once, there is the option of changing which ex’s account to collect benefits on. Say a single woman was married for 12 years to one man, and for 15 years to another. She could collect benefits on the first spouse’s account, if he was already 66, but later, if it turns out the other spouse had waited until 70 to start receiving benefits, she could switch to that spouse’s account for her spousal benefits. The same would apply to survivor benefits if one or both of those exes was deceased.

Dave Lindorff spent five years as a China correspondent for Businessweek, and has written for The Nation and Salon.com.