January 14, 2018
Every week, Simply Money’s Nathan Bachrach, Ed Finke and Amy Wagner are answering your financial questions. If you, a friend, or someone in your family has a money issue or problem, please feel free to send those questions to firstname.lastname@example.org
Kathy in Loveland: I’m 62 and just lost my husband. How do I apply for Social Security widow’s benefits?
Answer: Before you apply for your survivors Social Security benefit you may want to consider what amount you will be receiving.
You are technically eligible to start receiving survivors benefits as early as 60 (you can apply for the benefit at age 50 if you are considered disabled), however; you will get the maximum benefit if you wait until ‘full retirement age’ (FRA). Depending on your birthdate, these FRA ages can vary; and FRAs for survivors benefits are based on a different ‘birth table’ than regular benefits. However, if you decide to take your survivors benefit now when you’re only 62, it will be reduced.
If you decide to remarry at some point down the road, your new marriage will not affect your eligibility for survivors benefits since you would be remarrying after age 60.
Once you’ve determined the best time to take this benefit, you will have to either apply over the phone at 1-800-772-1213 or go into a local office – a widow, widower or surviving divorced spouse cannot apply for survivors benefits online.
If you visit ssa.gov, the website will give you all the appropriate information you need to make an appointment.
You’ll also probably need to have some paperwork handy. That list can be found here.
The Simply Money Point is that your Social Security benefit is a key part of your personalized financial plan. When you decide to file for your survivors benefit, make sure you stay organized. But don’t delay filing just because you don’t have all the needed documents – the Social Security Administration will help you get them.
Austin: I haven’t heard much about the bond market lately. Is it still safe to own bonds?
Answer: You haven’t heard much about bonds because stock markets have been unusually calm.
In 2017, the biggest drop in stocks was -2.8 percent. This was the second smallest drop in a calendar year since 1928. This is not normal, which is why bonds still matter. Stock market uncertainty will eventually return, and when it does, you’ll be glad you have bonds in your investment mix.
Historically, when stocks have dropped in value, bonds tend to increase in value. This helps to smooth the returns on your investment mix. Bonds also add value for you by generating consistent interest income that adds to the value of your investment mix.
With that said, all investments have a risk. And one of the risks to bonds is inflation coming in higher than expected, which forces the Federal Reserve (Fed), our nation’s central bank, to raise short-term interest rates more quickly than anticipated. If the Fed raises interest rates faster than expected, your bonds could drop more significantly in value (interest rates and bond prices often move in opposite directions).
But overall, Simply Money Advisors believes that the income bonds generate and their ability to act as ‘shock absorbers’ when the price of stocks fall are why bonds are a critical part of your investment mix.
The key is knowing how much in bonds you should own as a percent of your total investment mix.
The Simply Money Point is that the amount of stocks and bonds you own is a key factor in determining if you will be able to meet your short-term and long-term financial goals. We recommend you talk with a trusted financial planner (preferably a Certified Financial Planner™) to help you understand how much risk you should be taking so you are able to achieve your financial goals and objectives.
Responses are for informational purposes only and individuals should consider whether any general recommendation in these responses are suitable for their particular circumstances based on investment objectives, financial situation and needs. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing, including a tax advisor and/or attorney. Nathan Bachrach and Ed Finke and their team offer financial planning services through Simply Money Advisors, a SEC Registered Investment Advisor. Call (513) 469-7500 or email email@example.com.