Same-Sex Marriage Ruling and Social Security Claiming Strategies

Last month the Supreme Court ruled that all States must recognize same-sex marriages in Obergefell vs. Hodges.  The ruling basically federalized what many States (including Maryland) had already been doing on a State level.  What many might not realize is that the ruling may affect the benefits people receive when they begin collecting their Social Security.  Prior to the ruling the Social Security Administration (SSA) did not recognize a same-sex marriage as a marriage for the purposes of Social Security benefits.

Prior to Obergefell married couples had several Social Security claiming strategies to consider before initiating their Social Security retirement.  Throughout the years since its 1935 inception, Social Security has given special consideration to married couples when determining the payouts they may receive from the Trust Fund.  These claiming strategies can now be considered for same-sex marriages.

Ironically, the Supreme Court ruling may or may not be a benefit to a married couple as it pertains to Social Security benefits.  Whether it helps or hinders all depends on the unique circumstances of the individual.  For example, prior to this case, if someone was collecting a divorced-spouse benefit and had remarried under Maryland’s same-sex marriage law they could continue to collect their divorced spousal benefit since the SSA did not recognize the new marriage.  Now, that remarriage can cost them that benefit.

This is the same with a survivor benefit and then a same-sex remarriage.  That benefit is now in jeopardy once the SSA recognizes the new marriage.

However, many claiming strategies once reserved only for traditionally married couples are now in play for same-sex marriages.  These strategies are complicated and are best discussed with someone well-versed in Social Security tactics or by calling the SSA directly.  And it is not too early as some of the claiming strategies are implemented over many years and should be explored and planned for long before the actual SS retirement age (62 to 70 years of age).  If you are old enough to think about how and when you’re going to retire, then it is not too early to think about how and when you’re going to collect Social Security.  It is a vital part to most people’s retirement income.

One last thing, deciding whether to get married or not based on your Social Security situation is probably not a good idea.  All things being equal, this is just another thing in the marriage decision conundrum to think about.

 

Martin Knight MBA, CFP®
Chesapeake Investment Advisor, Inc.
106 Spring Ave.
Chestertown MD 21617