When you think of Social Security, you probably think of retirement. However, Social Security can also provide much-needed income to your family members when you die, making their financial lives easier.
Your family may be entitled to receive survivors benefits based on your work record.
When you die, certain members of your family may be eligible to receive survivors benefits (based on your earnings record) if you worked, paid Social Security taxes, and earned enough work credits. The number of credits you need depends on your age when you die. The younger you are when you die, the fewer credits youll need for survivors benefits. However, no one needs more than 40 credits (10 years of work) to be fully insured for benefits. And under a special rule, if youre only currently insured at the time of your death (i.e., you have 6 credits in the 13 quarters prior to your death), your children and your spouse who is caring for them can still receive benefits.
Your spouse age 60 or older (50 or older if disabled)
Your spouse at any age, if caring for your child who is under age 16 or disabled
Your ex-spouse age 60 or over (50 or older if disabled) who was married to you for at least 10 years
Your ex-spouse at any age, if caring for your child who is under age 16 or disabled
Your unmarried children under 19, if attending school full time (up to grade 12)
This is a general overview–the rules are more complex. For more information on eligibility requirements, contact the Social Security Administration (SSA) at (800) 772-1213 or
An eligible family member will receive a monthly survivors benefit based on your average lifetime earnings. The higher your earnings, the higher the benefit. This monthly benefit is equal to a percentage of your basic Social Security benefit. The percentage depends on your survivors age and relationship to you.
For example, at full retirement age or older, your spouse may receive a survivors benefit equal to 100 percent of your basic Social Security benefit. However, if your spouse has not yet reached full retirement age at the time of your death, he or she will receive a reduced benefit, generally 71 to 94 percent of your basic benefit (75 percent if your spouse is caring for a child under age 16). Your dependent child may also receive 75 percent of your basic benefit.
A maximum family benefit rate caps the total amount of money your survivors can get each month. The total benefit your family can receive based on your earnings record is about 150 to 180 percent of your basic benefit amount. If the total family benefit exceeds this limit, each family members benefit will be reduced proportionately.
You can get an estimate of how much your survivors might be eligible to receive using one of the benefit calculators available on the Social Security website,
If youve accumulated enough work credits, your spouse may receive a lump-sum benefit of $255. Your spouse must have been living with you at the time of your death or have been receiving benefits based on your earnings record if living apart from you. If youre not married at the time of your death, the death benefit may be split among any children you have who are eligible for benefits based on your earnings record.
If a loved one has died, contact the Social Security Administration immediately
If a loved one has died and you are eligible for survivors benefits, you should contact the SSA right away. If youre already receiving benefits based on your spouses earnings record, the SSA will change your payments to survivors benefits (if your children are receiving benefits, their benefits will be changed, too). But if youre not yet
receiving any Social Security benefits or if youre receiving benefits based on your own earnings record, youll have to fill out an application for survivors benefits.
Its helpful to have the following documents when you apply, but if you dont have all the information required, the SSA can help you get it:
Proof of death (a death certificate or funeral home notice)
Your Social Security number, as well as the deceased workers number
Your marriage certificate, if youre a widow or widower
Dependent childrens Social Security numbers, if available
Deceased workers W-2 forms, or federal self-employment tax return, for the most recent year
The name of your bank, as well as your account numbers, for direct deposit
Labels:Social Security Survivors Benefits
our goals and priorities will probably change as you plan to retire. Along with them, your insurance needs may change as well. Retirement is typically a good time to review the different parts of your insurance program and make any changes that might be needed.
After you retire, youll probably focus more on your health than ever before. Staying healthy is your goal. That may require more visits to the doctor for preventive tests and routine checkups. Theres also a chance that your health will decline as you grow older, increasing your need for costly prescription drugs and medical treatments. All of this can add up to substantial medical bills after youve left the workforce (and probably lost your employers health benefits). You need health insurance that meets both your needs and your budget.
Fortunately, youll get some help from Uncle Sam. You typically become eligible for Medicare coverage at the same time you become eligible forSocial Securityretirement benefits. Premium-free Medicare Part A covers inpatient hospital care, while Medicare Part B (for which youll pay a premium) covers physician care, laboratory tests, physical therapy, and other medical expenses. But dont expect Medicare to cover everything after you retire. For instance, youll have to pay a large deductible and make co-payments for certain types of care. Medicare prescription drug coverage is only available through a managed care plan (a Medicare Advantage plan), or through a Medicare prescription drug plan offered by a private company or insurer (premiums apply).
To supplement Medicare, you may want to purchase a Medigap policy. These policies are specifically designed to fill the holes in Medicares coverage. Though Medigap policies are sold by private insurance companies, theyre regulated by the federal government. There are 12 standard Medigap plans, but not all of them are offered in every state. All of these plans provide certain core benefits, and all but one offer combinations of additional benefits. Be sure to look at both cost and benefits when choosing a plan.
What if youre retiring early and wont be eligible for Medicare for a number of years? If youre lucky, your employer may give you a retirement package that includes health benefits at least until Medicare kicks in. If not, you may be able to continue your employers coverage at your own expense through COBRA. But this is only a short-term solution, because COBRA coverage typically lasts only 18 months. Another option is to buy an individual policy, though you may not be insurable if youre in poor health. Even if you are insurable, the coverage may be very expensive.
If youre able to stay healthy and active throughout your life, you may never need to enter a nursing home or receive at-home care. But the fact is, many people aged 65 and older will require some type of long-term care during their lives. And that number is likely to go up in future years because people are increasingly living longer. On top of that, long-term care is expensive. You should be prepared in case you do need long-term care at some point.
Unfortunately, Medicare provides very limited coverage for long-term care. You may be covered for a short-term nursing home stay immediately following hospitalization, but thats about it. Other government and military-sponsored programs may help foot the bill, but generally only if you meet strict eligibility requirements. For example, Medicaid requires that you exhaust most of your assets before you can qualify for long-term care benefits. Even a good private health insurance policy will not offer much coverage for long-term care. But most long-term care insurance (LTCI) policies will.
LTCI is sold by private insurance companies and typically covers skilled, intermediate and custodial care in a nursing home. Most policies also cover home care services and care in a community-based setting (e.g., an assisted-living facility). This type of insurance can be a cost-effective way to protect yourself against long-term care costs–the key is to buy a policy when youre still relatively young (most companies wont sell you a policy if youre under age 40). If you wait until youre older or ill, LTCI may be unavailable or much more expensive.
If you are in a long-term, committed relationship, you have many of the same financial concerns as married couples. However, you lack many of the legal protections and advantages that married couples enjoy. Here are some tips that can help you and your partner stay on the road to financial security.
One of the first financial decisions youll have to make as an unmarried couple is whether you should handle your finances separately or together. Sit down with your partner and discuss each others financial values, priorities and goals. Being open and honest now will help you and your partner avoid the arguments about money that plague most couples, married or unmarried.
How will you handle household expenses: separately or jointly? If you prefer a simple financial arrangement and want to avoid some of the liability associated with joint accounts, you can keep your finances separate. One of you pays the bills and collects money from the other, or you each pay for certain things separately. However, for the sake of convenience, many unmarried couples opt to pay household expenses together, as most married couples do. Keep in mind that if you do open a joint checking account, youll
each be responsible for all checks drawn (or overdrawn) on the account.
What about the rest of your income and other personal expenses? Will you pool all of your finances or keep some income separate for your personal use? Even if you decide to pay your bills together from a joint checking account, you can always keep separate accounts for personal expenses.
As an unmarried couple, you and your partner dont have to give up on planning for retirement together, but it may be harder for you than for married couples. Neither partner will be eligible for spousal benefits from two key sources of retirement income: Social Security and defined benefit pension plans (i.e., traditional pension plans).
However, if youre a little creative, there are other ways that you can provide an adequate living for your partner in retirement:
Designate your partner as the beneficiary of your retirement plan (e.g., 401(k)s, 403(b)s), if permitted, and of your IRAs.
Increase your savings now to replace the spousal benefits your partner wont receive from Social Security and your defined benefit pension plan.
Consider using life insurance to fund your partners retirement. As long as you can prove that you have an insurable interest, you can purchase an individual policy that names your partner as the beneficiary.
Before you jump into planning jointly for retirement, however, consider all of the possibilities. Although it may seem unlikely now, your relationship could end before you retire, leaving one or both of you with inadequate retirement income. In some cases, it may be wiser for each of you to plan for retirement on your own, even if you plan on being together forever.
Proper estate planning is essential for unmarried couples. The laws that protect married couples dont apply to you. Without proper protection, your surviving partner could be ordered out of a house that you share, and your next of kin could dispose of your estate however they choose. Your partner could also be left out of financial and medical decisions if you become seriously ill or incapacitated. You owe it to yourself and your partner to ensure that your estate will be handled according to your wishes. Here are some ideas to consider:
Consult an experienced estate planning attorney to help you protect your assets, your partner and your family.
Prepare a durable power of attorney for health care and finances, and name your partner as your representative.
Execute a will if you want to leave certain property to your partner. Without it, he or she has no legal right to inherit your estate.
Sign a domestic partner agreement. It wont replace your will, but it can support your will and your partners right to jointly held property by stating your wishes and intentions.
Location:10800 Midlothian Turnpike, Richmond, VA 23235, USA
I recently came across an error on my credit report. Is there any way I can fix it?
Good credit is an important part of your overall financial well-being. It can impact everything from the interest rates youll pay to being a prerequisite for employment. As a result, youll want to try to fix any errors on your credit report and have them removed as soon as possible.
Your first step should be to contact the credit reporting agency in writing to indicate that you are disputing the information contained on your credit report. The credit reporting agency usually has 30 days to complete an investigation of the disputed information. Once the credit reporting agency investigation is complete, they must provide you with written results of their investigation.
If, during its investigation, the credit reporting agency confirms that your credit report does contain errors, the information on your report either must be removed or corrected.
If the investigation does not resolve the issue, you still have a couple of options. First, you can try to mitigate the disputed information by adding a 100-word consumer statement to your credit bureau file. Even though consumer statements are often dismissed or ignored by potential creditors, it can at least provide you with a chance to tell your side of the story. You can also try to resolve the issue with the creditor that submitted the inaccurate information in the first place. The creditor will be obligated to investigate the disputed issue and notify you of its findings.
If you believe that the error is the result of identity theft, you may need to take additional steps to try and resolve the issue, such as placing a fraud alert or security freeze on your credit report. You can visit the Federal Trade Commission (FTC) website at
for more information on the various identity theft protections that might be available to you.
Finally, due to the amount of paperwork and steps involved, fixing a credit report error can often be a time-consuming and emotionally draining process. If at any time you believe that your credit reporting rights are being violated, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) at
Location:10800 Midlothian Turnpike, Richmond, VA 23235, USA
If youre considering retirement within the next five years or so, youre in the retirement zone. This is a critical time period during which youll be faced with a number of important choices, and the decisions you make can have long-lasting consequences. Its a period of transition: a shift from a mindset thats focused on accumulating assets for retirement to one thats focused on distributing wealth and drawing down resources. It can be confusing and chaotic, but it doesnt have to be. The key is to understand the underlying issues and to recognize the long-term effects of the decisions you make today.
If youve recently retired, youre also in the retirement zone. Youll want to evaluate your financial situation in light of the decisions that youve already made and consider adjusting your overall plan to reflect your current expectations and circumstances.
The first question that you should ask yourself is: Am I ready to retire? For many, the question isnt as easy to answer as it might seem. Thats because it needs to be considered on two levels. The first, and probably the most obvious, is the financial side. Can you afford to retire? More specifically, can you afford the retirement you want? On another level, though, the question relates to the emotional issues surrounding retirement–how prepared are you for this new phase of your life? Consider both the financial and emotional aspects of retirement carefully; retiring before youre ready can put a strain on the best-devised retirement plan.
Theres not always a right time to retire. There can be, though, a wrong time to retire. If youre not emotionally ready to retire, it may not make sense to do so simply because youve reached age 62 (or 65, or 70). In fact, postponing retirement can pay dividends on the financial side of the equation. Similarly, if youre emotionally ready to retire, but come up short financially, consider whether your plans for retirement are realistic. Evaluate how much of a difference postponing retirement could make and then weigh your options.
Transitioning into retirement: Financial issues
If you do not already have a projection of the annual income youll need in retirement, spend the time now to develop one. Factor in anticipated costs relating to basic needs, housing, health care and long-term care. If you plan to travel in retirement, estimate a corresponding annual dollar amount. If youre financially responsible for other family members or plan to make monetary gifts, youll want to include these commitments in your calculations.
Be as specific as you can. If its been more than a year since youve done this exercise, revisit your numbers. Consider and account for inflation.
Estimate the income youll be able to rely on from Social Security and any benefits from a traditional employer pension, and compare the result with your projected retirement income need. The difference may need to be funded through your personal savings.
Take stock of your personal savings. Are your personal savings sufficient to provide you with the annual income that youll need?
When will you retire? The age at which you retire can have an enormous impact on your overall retirement income situation, so youll want to make sure youve considered your decision from every angle. Why does the timing of your retirement make such a difference? The earlier you retire, the sooner you need to start drawing on your retirement savings. Youre also giving up what could be prime earning years, when you could be making substantial additions to your retirement savings. That combination, even for just a few years, can make a tremendous difference.
The longer the retirement period that you need to plan for, the greater the potential that inflation will eat away at your purchasing power. That means the earlier you retire, the more important it is to account for inflation in your overall plan.
You can begin receiving Social Security retirement benefits as early as age 62. However, your benefit may be as much as 20 to 30 percent less than if you waited until full retirement age (65 to 67, depending on the year you were born). Weigh your options, and choose the start date that makes the most sense for your individual financial circumstances.
If youre covered by a traditional employer pension plan, check to make sure it wont be negatively affected by your early retirement. Because the greatest accrual of benefits generally occurs during the final years of employment, its possible that early retirement could reduce the benefits you receive. Make sure that you understand how the plan calculates benefits and any payout options under the plan.
If you plan to start using your 401(k) or traditional IRA savings before you turn 59 (55 in the case of distributions from a 401(k) plan after you terminate employment), you may have to pay a 10 percent early distribution penalty tax in addition to any regular income taxes (with some exceptions, this includes payments made due to disability). Consider as well the order in which youll tap your personal savings during retirement. For example, you might consider withdrawing from tax-advantaged accounts like IRAs and 401(k)s last. If you postpone retirement beyond age 70,
youll need to begin taking required minimum distributions from any traditional IRAs and employer-sponsored retirement plans (other than your current employers retirement plan), even if you do not need the funds.
Youre not eligible for Medicare until you turn 65. Unless youll be eligible for retiree health benefits through your employer (or have coverage through your spouses plan), or you take another job that offers health insurance, youll need to calculate the cost of paying for insurance or health care out-of-pocket, at least until you can receive Medicare coverage.
Many individuals choose to work in retirement for both financial and non-financial reasons. The obvious advantage of working during retirement is that youll be earning money and relying less on your retirement savings–leaving more to potentially grow for the future and helping your savings last longer. But many retirees also work for personal fulfillment–to stay mentally and physically active, to enjoy the social benefits of working, or to try their hand at something new. If you are thinking of working during your retirement, youll want to make sure that you understand how your continued employment will affect other aspects of your retirement. For example:
If you continue to work, will you have access to affordable health care through your employer? If so, this could be an incredibly valuable benefit.
Will working in retirement allow you to delay receiving Social Security retirement benefits? If so, your annual benefit when you begin receiving benefits may be higher.
If youll be receiving Social Security benefits while working, how will your work income affect the amount of Social Security benefits that you receive? Additional earnings can increase benefits in future years. However, for years before you reach full retirement age, $1 in benefits will generally be withheld for every $2 you earn over the annual earnings limit ($15,120 in 2013). Special rules apply in the year that you reach full retirement age.
Some employer pension plan programs allow for phased retirement. These programs allow you to continue to work on a part-time basis while accessing all or part of your pension benefit. Federal law encourages these phased retirement programs by allowing pension plans to start paying benefits once you reach age 62, even if youre still working and havent yet reached the plans normal retirement age.
Many people who count on working in retirement find that health problems or job loss prevents them from doing so. When making your retirement plans, it may be wise to consider a fallback plan in case everything doesnt go as you expect.
A bank account can be designated as payable on death to someone of your choice. The bank pays these funds to this person almost immediately at your death, and the funds will generally not be subject to probate.
The payable on death designation is very simple and flexible. You can change the designation until your death and the individual you designate has no right to the money until your death. Indeed, the individual will not receive the account unless he or she outlives you. A POD designation can also be used with U.S. savings bonds.
A typical bank account would be subject to probate at your death. Property subject to probate generally incurs fees, such as attorneys fees, and the transfer of probate property may be subject to delays of one to several years. A POD account usually avoids probate, and the named beneficiary can generally access the funds immediately after your death, without significant delays.
The requirements for a POD account may vary somewhat under state law, and state lawsdetermine what is subject to probate. Ask your bank, attorney, or financial advisor to make sure that the account wont be subject to probate. A POD designation used with appropriate U.S. savings bonds will not be subject to probate in any state.
You do not make a gift for gift tax purposes when you name the beneficiary of a POD account. You remain subject to any income tax on funds in a POD account while you are alive. And funds in a POD account are subject to estate tax upon your death. Of course, if your spouse is the named beneficiary, the funds would qualify for the estate tax marital deduction. If the named beneficiary is two or more generations younger than you (e.g., a grandchild), the funds may also be subject to generation-skipping transfer (GST) tax at your death. Substantial exemptions ($5,250,000 in 2013) are available to protect property from estate tax or GST tax.
A similar provision, transfer on death (TOD), is available for the transfer of stocks, bonds, and mutual funds to a named beneficiary at your death.
Location:10800 Midlothian Turnpike 204, Richmond, VA 23235, USA
I just bought a vacation home. Do I need to purchase a specific type of insurance?
want to purchase insurance that is specifically geared to provide coverage for this type of property.
When insuring a vacation home, the type and cost of coverage will vary, depending upon the insurance company and the state in which your vacation home is located.
Most insurers offer at least some type of insurance that is specifically designed for second/vacation homes. Coverage under these types of policies can range from standard coverage that protects against certain named perils, to more comprehensive coverage that protects against all perils unless specifically excluded in a policy.
Keep in mind that, depending on what is covered under the policy, you may need to obtain additional protection (e.g., property or liability coverage) through either an endorsement or separate policy. In addition, if your vacation home is located in an area that is susceptible to flood damage–which is not covered under a standard vacation home policy–youll want to look into obtaining separate coverage for that peril as well.
Due to some of the unique circumstances surrounding vacation homes (e.g., high-risk location, not being occupied for long periods of time), vacation home insurance premiums are usually much higher than those for a primary residence.
However, you may be able to save money by insuring your vacation home with the same company that provides coverage for your primary residence (some insurers may require this). In addition, you may be eligible for other discounts, such as those offered for newly built homes, nonsmokers, and homes that have a security system installed. Policy discounts will vary by state and insurer.
Because of the vast array of vacation home insurance products on the market, youll want to be sure to shop around for the best coverage and rates. You may also want to contact the state department of insurance where your vacation home is located for additional information on the coverage and rate options that may be available.
Location:10800 Midlothian Turnpike 204, Richmond, VA 23235, USA
Whether your vacation budget is big or small, no one likes to spend more than necessary
when traveling. Here are some tips that can help you save on your next trip.
Pick your travel times wisely. Popular wisdom holds that Tuesday and Wednesday are the least expensive days to travel, but this isnt necessarily the case in all markets or at all times of the year. If possible, search for airfares within two or three days of your ideal departure date, and consider off-peak flight times.
Search for flights at more than one airport. If youre willing to depart from any airport near you or arrive at any airport relatively close to your destination, youll have a better chance of snagging a lower-cost flight.
Sign up for fare alerts. Online travel agencies, travel websites,
or the airlines themselves can notify you when airfare hits a low price point or drops by a certain percentage.
Compare baggage charges. Dont settle on a fare before seeing how much extra youll pay to check your luggage.
Save on parking. At many airports you have the option of parking in an economy lot. At larger airports, you may be able to save even more by parking offsite at private lots. Some hotels offer packages that allow you to spend the night before your flight and leave your vehicle there until you return.
Check hotel websites. Many list their rate calendars on their reservations page so you can see for yourself when rooms are available (and at what price).
Look for freebies. For example, does the hotel offer complimentary transportation to the airport, restaurants, or local attractions? Does the rate include breakfast (having a meal included can save you a bundle, especially on longer trips or family vacations).
Share amenities. Love the amenities at a luxury resort but not the price tag? Book a room at a lower-priced hotel that allows you to use the facilities of a higher-priced sister property.
Watch out for taxes. Though you cant avoid them, lodging taxes vary by location and are based on the room rate, so you can save money on taxes by booking a lower rate or, in some cases, by choosing a different location (a property outside the city, for example).
Compare extra person charges. Will your kids stay for free? Hotel chains often allow up to two adults and two children age 17 and younger to stay in o