TRANSCRIPT
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#85 - Social Security: Essential Rules for Women and Divorcees
Eric Blake: What if one decision could give you a lifetime of higher, inflation-adjusted income in retirement? Welcome to another episode of the Simply Retirement Podcast, where we want to empower and educate women to live your retirement on your terms. I’m your host, Eric Blake, founder of Blake Wealth Management, and I would not be the man I am today without the women in my life.
Today’s episode is going to be just a little bit different. I recently joined Karen Covey, divorce coach, attorney, and mediator, on her show The Off the Fence Podcast to talk about some of the most common and costly Social Security mistakes people make—and how to make better claiming decisions that could dramatically improve your retirement income, especially if you find yourself in the middle of, or on the other side of, divorce.
We covered everything from ex-spousal and survivor benefits to what happens if you keep working while receiving benefits, and how smart timing and tax strategies can make a major difference. And stay tuned until the end for a little teaser, because in our next episode, Karen will actually be joining me right here on the Simply Retirement Podcast to talk about one of her specialties—helping women navigate divorce with clarity and confidence.
Let’s dive in.
Karen Covy: Hello and welcome to Off the Fence, a podcast where we deconstruct difficult decision-making to try to figure out what keeps us stuck—and more importantly, how do we get unstuck. I’m your host, Karen Covey, a former divorce lawyer, mediator, and arbitrator turned coach, author, and entrepreneur. With me today, I have the pleasure of speaking with Eric Blake.
Eric is a certified financial planner professional and the founder of Blake Wealth Management, specializing in helping women over 55 navigate retirement with clarity and confidence. With more than 25 years of experience, Eric provides strategies to optimize investments, optimize Social Security, create reliable income, and minimize taxes.
Inspired by his mother and grandmother’s financial journeys, Eric has a personal passion for empowering women to take control of their financial future. He’s also the host of the Simply Retirement Podcast. Eric, welcome to the show.
Eric Blake: Thank you so much. I’m so excited to be here, and it’s an honor to join you.
Karen Covy: Oh my goodness, you’re not the only one who’s excited. I have been. And like we were talking about before the show started, I don’t even know how we’re going to cover everything that needs to be covered in this one episode. But we’re going to do our best here, and if need be, I’ll bring you back again.
You are here, and I really want to talk to you about Social Security, because for so many people, Social Security is just like this black cloud of, “I know I’m entitled to something, but I have no idea how it works.” So let’s talk about Social Security retirement benefits.
I think one of the first things people have questions about is when they should start claiming their benefits, right? Because the retirement age seems to keep changing over time. It used to be 65, period, full stop, and now it’s all different kinds of things. And when you start claiming Social Security benefits determines how much money you get. So can you explain how all of that works?
Eric Blake: Sure. Yeah, I’ll get this all done real quick here.
I think the biggest thing you want to start with is, when you look at your Social Security statement, you want to figure out, number one, what is your full retirement age, and number two, what is my full retirement age benefit?
The full retirement age has changed. Back in 1983, that’s when the current rules were put in place, increasing the full retirement age to 67. But as many people have probably figured out, it took about 40 years for that to actually happen. That’s where some of the confusion comes in—where it was 66, then 66 and two months, 66 and four months, and so on, based on the year you were born.
But basically, right now, it’s relatively simple. If you were born in 1960 or later, your full retirement age is 67. When we’re talking about people in the retirement-planning phase, that applies to most people.
Once you know your full retirement age and your full retirement age benefit, that age is when you can start receiving your full benefit with no reduction. If you start earlier than your full retirement age, your benefit is going to be reduced by some percentage.
There are a lot of different rules of thumb, but as complex as Social Security can be, it really needs to be an individualized decision based on your cash-flow needs and your other resources. Life sometimes just happens, and we have to make decisions on the fly.
You may go into it thinking, “Here’s when I plan to start,” but if life happens and you need to start sooner, so be it. Or, if you have the opportunity to delay, your benefit can increase beyond your full retirement age, up to a maximum benefit at age 70.
Keep in mind, we’re talking about your personal retirement benefit here. We’ll get into spousal benefits, ex-spousal benefits, and all those fun topics as well. But that’s the basic framework.
Karen Covy: Okay, so let me ask you a question. Let’s say I’m approaching full retirement age, but I’m not there yet. My decision is: do I start now, do I start at full retirement age, or do I wait until I’m 70?
How do I figure out what’s going to ultimately put the most dollars in my pocket? Because if I start earlier, I may be getting less money, but I’ll be getting it for longer, assuming I live an average lifespan.
Eric Blake: If you could tell me when you’re going to pass away, I’ll give you the exact answer. That’s the easiest way to do it.
But that’s the trick. We look at longevity, family history, and other variables in your life. We also look at your other resources.
The maximum benefit from your own retirement benefit is at age 70. The question then becomes, how long do you have to live before that pays off?
For most people, if you wait until 70, the break-even point is somewhere in the early 80s—around age 81 or 82. That’s when the lifetime benefits from waiting surpass what you would have received by starting earlier.
Karen Covy: Okay, that makes sense. Let me ask you another question.
If I’m still working—because a lot of people are vibrant, able to work, and either want to work or have to work—what happens if they’re still working at age 67? Does it make sense to start claiming Social Security then, or does it get reduced because they’re still working?
Eric Blake: That’s a great question. I actually did a podcast episode on this topic, and it’ll be out in a couple of weeks.
This is where break-even calculators often miss the mark. It’s not just about comparing lifetime benefits at different claiming ages. You also have to factor in whether you’re working.
That’s why this is so individualized. Many people continue working into their late 60s or early 70s, sometimes because they don’t know what else they would do.
This is where full retirement age becomes critical. For simplicity, let’s assume full retirement age is 67.
If you start receiving Social Security benefits before full retirement age and you’re working, you’re subject to something called the earnings test. That means you can only earn up to a certain amount before your benefit may be reduced.
Once you hit full retirement age, you can work and earn as much as you want with no impact on your Social Security benefits.
Karen Covy: Okay, let me stop you and make sure I understand this.
If I’m 67, at full retirement age, and I’m earning $100,000 a year, is there any reason I would not want to claim Social Security if I could?
Eric Blake: That often comes down to how you emotionally think about your finances.
If I told you that by delaying three more years, you’d get a guaranteed 24% increase in your benefit for the rest of your life—and that income would also increase with inflation—would that help you sleep better at night?
If your full retirement age benefit is $3,000 and you wait three more years, that benefit might be closer to $3,800 for the rest of your life.
Karen Covy: Okay, let’s change the scenario. Let’s say I’m 70. Social Security is never going to get better than that, right?
Eric Blake: Right.
Karen Covy: I’m 70, still working, and making $100,000 or $200,000 a year. Is there any reason not to claim Social Security? Will it get reduced?
Eric Blake: There are very few situations where you wouldn’t apply at 70. There’s no benefit to waiting beyond that point.
One of the only reasons you might delay is for tax-planning purposes. For example, if you turn 70 in July but have a full year of salary, you might wait and file retroactively for up to six months. That way, your benefits don’t start until January, when you’re in a lower tax bracket.
But for most people, once you hit 70, you apply and move forward.
Karen Covy: That makes sense. And just to clarify, you pay income tax in the year you receive the income, right? Even if it’s retroactive?
Eric Blake: Exactly. If you receive the money in 2026, it’s 2026 income.
If you’re making $150,000 in 2025, you may not want to add Social Security income if it pushes you into a higher tax bracket. We also have the One Big Beautiful Bill Act, which added a $6,000 deduction for individuals age 65 and older. If Social Security income pushes you above that threshold, you could lose that deduction.
That’s where retirement income planning becomes a puzzle. You have IRAs, 401(k)s, Social Security, taxes—how do you put all the pieces together in a way that makes sense for you?
Karen Covy: I love that. And when you add divorce into the mix, it gets even more complicated. Often one spouse stayed home and doesn’t have the same benefit.
Can you explain spousal benefits?
Eric Blake: Absolutely. First, you have to distinguish between spousal benefits and survivor benefits.
A spousal benefit is based on the higher earner’s record while they’re alive. A survivor benefit applies after they pass away.
For spousal benefits, the maximum is 50% of the higher earner’s full retirement age benefit. If you claim before your full retirement age, that benefit is reduced.
If the higher earner’s benefit is $3,000, 50% is $1,500. If you claim early, it might be closer to $1,000.
Karen Covy: Yikes. So what about survivor benefits?
Eric Blake: Survivor benefits allow you to receive 100% of what your spouse—or ex-spouse—was receiving at the time they passed, or what they would have received at full retirement age.
If you’re already receiving a spousal benefit, you’ll generally be switched automatically to the survivor benefit. But if you’re on your own benefit, you must apply for the survivor benefit to receive the higher amount.
Karen Covy: And if I didn’t know that and missed out for a year, can it be retroactive?
Eric Blake: You can receive up to six months of retroactive benefits.
There’s also the Social Security Fairness Act, passed in early 2024, which eliminated the Windfall Elimination Provision and the Government Pension Offset. These rules disproportionately affected women, especially teachers.
Many women may now be eligible for benefits they were previously denied, including survivor benefits, and those benefits can be retroactive to January 1, 2024.
Karen Covy: That’s huge.
Eric Blake: It’s a life-changer for many women. But you have to know about it and apply.
Karen Covy: Let’s talk about divorce rules.
Eric Blake: Two key things: full retirement age and 10 years.
If you were married for at least 10 years, you may be eligible for ex-spousal benefits or survivor benefits.
If you remarry, you’re no longer eligible for ex-spousal benefits, but you may still be eligible for survivor benefits if you remarry after age 60.
Karen Covy: And if there were multiple marriages?
Eric Blake: As long as each marriage lasted at least 10 years and you meet the other rules, multiple ex-spouses can receive benefits based on the same worker’s record.
Karen Covy: Wow.
Eric Blake: This is why it’s so important to work with a financial advisor who understands this phase of life. These decisions are very different from what a 37-year-old is making.
Karen Covy: Social Security rules are complicated and evolving.
Eric Blake: They are. And people should feel empowered to ask advisors how they stay current on tax law, Social Security, and retirement distribution rules.
Karen Covy: Eric, this has been incredible. Can you tell people where to find your resources?
Eric Blake: Absolutely. You can download our Complete Guide to Women’s Social Security Success at womenssocialsecurityguide.com. It includes checklists, quick-reference guides, and detailed explanations of spousal, ex-spousal, and survivor benefits.
You can also visit blakewealthmanagement.com or listen to the Simply Retirement Podcast, where we cover these topics in depth.
Karen Covy: Thank you so much, Eric. This has been eye-opening.
Eric Blake: It was an honor.
Eric Blake: I hope you enjoyed that conversation with Karen Covey on the Off the Fence podcast. I always appreciate the opportunity to talk about Social Security and how it fits into a broader retirement income plan. These decisions are too important to make in isolation.
Next week, the tables are turned—Karen will be joining me here on the Simply Retirement Podcast to talk about moving forward with strength and strategy after divorce.
Until next time, please remember: retirement is not the end of the road. It’s the start of a new journey.
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