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Eighty-three percent of respondents were concerned about the viability of Social Security. Currently, however, there is a large surplus credited to the Social Security Trust Fund. The Brookings Institute estimates that even in 2022, the Social Security Trust Fund will have a surplus of $3.7 trillion in reserves. While more and more Baby Boomers retire, the annual amount of total revenue received will exceed the inflows from taxes, and barring any changes to the system, the surplus is expected to run out in approximately 2036, the report said. For someone turning 66 now, that will be when they are 90. Even then, however, without any changes, Social Security will still be able to pay close to 80 cents for every $1 of benefit. The BMO study also found that Social Security benefits have become synonymous with retirement. Sixty-four percent of those taking their Social Security benefits past FRA were doing so because they worked past this age. For those claiming early, 69% said it was because they were no longer working (46% retired early, 23% lost their job or were forced to retire). Therefore, the claiming decision appears to be largely based on employment status rather than on any strategic long-term approach to lifetime income. Another benefit retirees seem to be unaware of is spousal option, with almost half (49%) of survey respondents saying they were not knowledgeable about it. Fifty-six percent say they are not at all or not very knowledgeable about widow benefits; 39% are unaware they can receive up to 50% of their spouse’s benefit; and 47% do not know a widow gets 100% of her spouse’s benefit.Earlier BMO report findings stress the importance of being prepared for the possibility of being single in retirement. Research found that 27% of those 65 and older were widowed, and 12% were divorced. Therefore, almost four in 10 will be able to make a claim on a spouse or former spouse’s benefit, so it is important to know the basic benefit rules for widows and divorced spouses.Divorced spouses need to be aware that they can apply for the same benefits as married spouses. The basic rules for divorced spouses are that the marriage must have lasted for 10 years, they must be at least age 62 and not currently married. As long as they have been divorced for two years, then they only need their ex-spouse to be eligible for benefits; they don’t have to wait for them to actually file for them. Furthermore, assuming they have not remarried, divorced spouses are eligible for the 100% widow benefits.
Eighty-three percent of respondents were concerned about the viability of Social Security. Currently, however, there is a large surplus credited to the Social Security Trust Fund. The Brookings Institute estimates that even in 2022, the Social Security Trust Fund will have a surplus of $3.7 trillion in reserves. While more and more Baby Boomers retire, the annual amount of total revenue received will exceed the inflows from taxes, and barring any changes to the system, the surplus is expected to run out in approximately 2036, the report said. For someone turning 66 now, that will be when they are 90. Even then, however, without any changes, Social Security will still be able to pay close to 80 cents for every $1 of benefit.
The BMO study also found that Social Security benefits have become synonymous with retirement. Sixty-four percent of those taking their Social Security benefits past FRA were doing so because they worked past this age. For those claiming early, 69% said it was because they were no longer working (46% retired early, 23% lost their job or were forced to retire). Therefore, the claiming decision appears to be largely based on employment status rather than on any strategic long-term approach to lifetime income.
Another benefit retirees seem to be unaware of is spousal option, with almost half (49%) of survey respondents saying they were not knowledgeable about it. Fifty-six percent say they are not at all or not very knowledgeable about widow benefits; 39% are unaware they can receive up to 50% of their spouse’s benefit; and 47% do not know a widow gets 100% of her spouse’s benefit.
Earlier BMO report findings stress the importance of being prepared for the possibility of being single in retirement. Research found that 27% of those 65 and older were widowed, and 12% were divorced. Therefore, almost four in 10 will be able to make a claim on a spouse or former spouse’s benefit, so it is important to know the basic benefit rules for widows and divorced spouses.
Divorced spouses need to be aware that they can apply for the same benefits as married spouses. The basic rules for divorced spouses are that the marriage must have lasted for 10 years, they must be at least age 62 and not currently married. As long as they have been divorced for two years, then they only need their ex-spouse to be eligible for benefits; they don’t have to wait for them to actually file for them. Furthermore, assuming they have not remarried, divorced spouses are eligible for the 100% widow benefits.