Widowhood and Social Security (55, pension, marriage, federal)

[jontwin4]

I was recently widowed and will be applying for Social Security "child in care" benefits. I expect to be awarded about $1,400 per month. My adult daughter with severe disability before age 22 will be receiving DAC benefits in the same amount. Both of our amounts will be based on my husband's earnings.

At age 55, I want to revive my freelance editing business. My understanding is that anything I make over $15K or so will reduce my benefits by $1 for every $2 earned.

So, let's say I earn about $20k. I would be about 5K over the earnings limit so I would lose about $2,500 of nontaxable SS child care benefits. However, on my earnings I would not only pay federal and state taxes but would also pay the entire amount of SS tax (self-proprietorship). Am I going to end up paying to work since work expenses are negligible? The goal would be for me to eventually surpass the need for the SS, but in the beginning, we will be struggling.

Also:
-- As I lose benefits due to earnings, will my daughter lose corresponding benefits? Or not, since we are on my husband's SS account?

-- Do I have to have the benefits be retroactive back to my husband's death? He was a self-proprietor as well, and the income he made the week of his death is continuing to come in -- and will total about 8K, which would even further limit how much income I could make without losing SS.

-- If I continue to contribute to a tradional IRA, can I lower the amount that would count against me for earnings? IOW, are the SS deductions based on TOTAL income or adjusted income?

I am surprised at how much working is discouraged by these rules. Doesn't the government want me to work? I may temporarily need help from SS, but I bet in two or three years, I could be a productive, tax-paying member of society again.

[yellowsnow]

I get widow's benefits too. My best advice is to never do anything that could jeopardize them.

But especially because of your special needs child, you need expert advice. Like from lawyers, financial planners, and social workers. Start collecting advice but don't make changes yet. Take some time to see what's going to shake out in the wash!

How long has it been since you have done any freelance editing? It's rough out there. I think it would be miraculous if you made that much money. Journalists of all flavors are a dime a dozen. My SO writes and edits for a 'living'. $50 to edit a whole BOOK is pretty common. I write too. Articles for pennies. Literally!

Anyway, your benefits are real. You can count on them. The other stuff is pie in the sky. Make sure you have a pie before you do something you may regret.

[jontwin4]

But I have to do something if I don't want to try to live off of the benefits, right?... Are you perhaps able to live off them? I need to leave our retirement alone as I will be lucky if it proves to last until my death.

Yes, you are right about the lack of money-making potential in this field. That was why we focused our efforts on my husband's business. Unfortunately, that is no longer possible and editing is my best skill.

-- Thank you for your response!

[Lyndarn]

Originally Posted by jontwin4

But I have to do something if I don't want to try to live off of the benefits, right?... Are you perhaps able to live off them? I need to leave our retirement alone as I will be lucky if it proves to last until my death.

Yes, you are right about the lack of money-making potential in this field. That was why we focused our efforts on my husband's business. Unfortunately, that is no longer possible and editing is my best skill.

-- Thank you for your response!

Is it possible for you to just have your daughter ,who is disabled give you her Power Of Attorney over her financial decisions? and then only she would be taping into your late husbands SS benefits. This way your income should have nothing to do with her claim? That way you can continue to work and do whatever ?

Just thinking outside the box..

[yellowsnow]

^^^^This is why you need all kinds of expert advice! From people smarter than me!

One thing I know is you may need to analyze WHEN to apply. You don't want to start out behind the eight ball on earnings because of what is still coming in from your H's business. However, be sure...his income may not affect you. Do you own the business too? Any chance you could continue his business?

Some earnings count against you and others don't. I know my pension does not count against me as earnings. I THINK inheritances and life insurance payouts don't count either. Generally speaking, a pay check you earn is what counts as earnings. The amount you can earn changes every year. Here's the 2016 info.

If you're younger than full retirement age, there is a limit to how much you can earn and still receive full Social Security benefits. If you're younger than full retirement age during all of 2016, we must deduct $1 from your benefits for each $2 you earn above $15,720.
How Work Affects Your Benefits - Social Security
https://www.ssa.gov/pubs/EN-05-10069.pdfSocial Security Administration

Don't worry about anything yet. Collect data and advice. Do some spreadsheets and lists. Figure out what it actually costs you to live and know where the money is going. Another good list is assets VS debts. It will take you some time to do this and having this information to give to the above mentioned experts will help them give you the best advice. Also serves to make you more aware of your financial picture.

Are your 2016 taxes done? If not discuss filing for an extension with your accountant due to the unexpected death of your H. Another thing you need to do is file for your H's SS death benefit. Yes, it's only $250 but take what you can get. And you need your marriage certificate to apply for widow's benefits too.

And BTW if you remarry before 60, you lose those benefits!

[jontwin4]

Thank you again, yellowsnow. This is good information and gives me a good start on what to do next.

[Blondy]

My advice is make an appointment with your local Social Security office.


My sister was recently widowed and they were very helpful in explaining her options and running numbers for different options.


We researched their website and other places and felt we understood and most of what they gave us confirmed that.


So, do as much research as you can on your own, list all your questions. See what they say. And ask them to point you to the info online that verifies what they are saying.


If you still have questions or you don't feel comfortable with their explanation, then consult a lawyer who deals with SSA issues.

[Suevee]

Don't know if this will help but I have a friend who is employed as an editor for a medical journal. He mostly works from home. I would think that the medical field's need for editors would be high. Also I by continuing to pay into your own social security by age 70 your social security could be higher than your husband's. You could claim your own at a higher payout replacing your husband's. This would also benefit your daughter as she could be claimed on your higher benefit.

At full retirement age there is no offset to the amount you earn. Also your current social security is based on last earnings. It will be adjusted automatically next year to include any 2016 earnings. This happened to me.

Also your husband's income should be payed into his estate and count towards his social security. It should not effect your earnings. The money you receive from social security as a parent of a disabled child may not be effected by the earning offset. Regular widow's benefits without children can not be received until age 60. These may be 2 different things. As other posters have suggested you should make an appointment and speak to a ss representative.

I hope things work out for you.