Loss of Spousal Social Security Benefit After Remarriage Is Hardly a Penalty

Q.I have read with interest your response to the Social Security benefit questions pertaining to former spouses, particularly that remarriage cancels any benefits someone might receive based on an ex-spouse’s work record. I was married for 18 years to a man who contributed the maximum to Social Security every year. After my divorce, I remarried a man who does not qualify for Social Security as he worked for a county government that opted out of the program. Although I do quality for Social Security on my own, it would be a very small benefit because I was basically a stay-at-home mom for many years. If my current husband does not qualify for Social Security, am I still precluded from benefits under my former husband’s account? If not, isn’t this another form of marriage penalty, and isn’t that unfair?

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A.No, it’s not unfair, and you’d have to have a pretty broad definition of “marriage penalty” for this situation to qualify.

You can’t get a Social Security benefit based on your ex’s work record if you’ve remarried. Period. Your current husband’s Social Security record, or lack thereof, is irrelevant.

In any case, you are probably getting a better deal with your husband, who probably qualifies for a county pension that is more generous than anything he might received from Social Security. Social Security was designed to provide a bare minimum of support for the retired. Pensions offered to teachers and government workers not covered by Social Security, on the other hand, tend to be quite generous; some replace more than 75% of the worker’s pre-retirement salary. Social Security replaces at most about one-third of a worker’s wages; for high earners, it can be less than 10%.

The idea behind the partial benefit for ex-spouses was to prevent retirees who had been stay-at-home parents from falling into abject poverty after a divorce. By your definition, anyone who divorced a wealthy spouse and married a poorer one would be suffering a marriage penalty. Although that might be economic reality, it’s hardly a situation that Social Security should be expected to fix.

Help for Smaller Accounts

Q. I’m looking for a financial planner who can help me sort out my retirement savings. I have about $50,000, mostly in my 401(k), plus a few small savings accounts. I just need someone objective to get me started, and then I can take over the rest. Can you recommend someone in my area?

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A. Even if I could, they probably wouldn’t take you on as a client.

That’s the dirty little secret of personal finance journalism. Most of the fee-only planners we talk to and quote in our articles are not available to the average Joe or Jane. The planners I know in your area all require new clients to have investable assets (that is, money outside of 401[k]s and real estate) of $250,000 and up. They also want to be able to manage your money in exchange for an annual fee, usually about 1% of your assets. That’s the awful Catch-22 of financial planning: Unless you have enough money, it’s hard to get good help.

Planners who accept commissions instead of fees might be willing to take you on, but they would expect you to buy the products they recommend--the ones that pay them commissions. If most of your money is tied up in your 401(k), however, they wouldn’t be able to make much from you in commissionable sales, so you might not even be able to get their attention.

I can recommend two good online services, though. Quicken at https://www.quicken.com has what it calls a 401(k) advisor that will look at your 401(k) and one IRA, ask you some questions about risk and goals and then pick which 401(k) funds you should invest in and how much you should put where. It coordinates those picks with suggestions for your IRA too. If you work for one of 600 selected companies, your 401(k) funds are already loaded into the calculations; otherwise, you can just enter the choices.

Financial Engines at https://www.financialengines.com is another good site. It takes a look at what you have in your 401(k) and IRAs (it can handle more than one) and does some calculations to determine the probability of meeting your goal. For $14.95 per quarter, it will also give you asset allocation advice (what to put where) so you can improve your chances. If your employer has a special agreement with the site, this advice might be available free.

I’m guessing either of these sites could do what you need for right now. When your portfolio is larger or your needs become more complex, you might want to track down more personalized help.