Social Security for Younger Retirees

on her own record, she will get a big reduction in her widow’s benefits someday (assuming I die before she does). Is this true?

A: No, it is not true. If she takes reduced retirement benefits on her own account, that reduction DOES NOT carry over to her widow’s benefit. Her widow’s benefit will be based on one thing only: her age when you die and when she starts her widow’s benefits. Assuming she is over her full retirement age when that happens, her own reduced retirement benefit will be supplemented up to 100% of what you were getting at the time of death.

And FYI: assuming her own benefit is much smaller than yours, that benefit will be supplemented with some spousal benefits on your record. That supplement will be based on your full retirement age benefit, not your augmented age 70 rate. And just like her retirement benefit will be reduced, so too will her spousal benefits. But after you die, it’s a different story. Her widow’s rate will be based on your age 70 benefit, not your FRA benefit. And again, assuming she is over her own FRA when you die, there will be no reduction in that widow’s benefit.

Q: In a recent column, you gave an example of a guy who was 67 on April 7. And that’s when he wanted his benefits to start. You said that the first check he would be due is the April check, which would be paid in May. Well, I just signed up for my Social Security to start at age 62. I am 62 on June 12. But a letter I got from Social Security said my first check would be the July check, payable in August. What’s going on?

A: There is one little glitch to starting benefits at age 62. There is a law that says you must be 62 for an entire calendar month before you can get your first Social Security check. July is the first month you are 62 for the whole month, so that’s the first check you are due, payable in August.

Q: I am 53 and my wife is 50. We have had a very successful business and have made enough lucrative investments so that we have been able to sell the business and retire. But now we are a bit concerned about our future Social Security benefits. We could start another business, and pay ourselves a salary, just so that we continue to pay into Social Security until our mid-60s. But we are not sure if we will be compensated enough in potential Social Security benefits to offset all the Social Security taxes we will pay. Can you help?

A: You really need to talk to a financial planner about this -- not me. And frankly, I’m surprised you are even thinking about Social Security. If you could afford to retire comfortably in your early 50s, it seems to me that fu- ture Social Security benefits wouldn’t be much of a concern for you. But since you brought it up, I’ll give you some food for thought.

Your Social Security benefit will be based on your highest 35 years of earnings. If you remain retired, you will be missing out on about 15 years of what would normally be some of your highest years of income. And this will have an obvious adverse impact on your future Social Security benefits.

To find out how much of an impact, you should use the retirement calculators at the Social Security Administration website: www.socialsecurity.gov. Just click on the “Plan for retirement” link on the homepage and follow the instructions. You can use their retirement estimators and plug in various future earnings scenarios to come up with different estimates of your eventual retirement benefits.

If you have a Social Security question, Tom Margenau has two books with all the answers. One is called “Social Security -- Simple and Smart: 10 Easy-to-Understand Fact Sheets That Will Answer All Your Questions About Social Security.” The other is “Social Security: 100 Myths and 100 Facts.” You can find the books at Amazon.com or other book outlets.

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