Though the IRS has announced that same sex couples will be fully recognized for tax purposes, not all government agencies have modified their rules and requirements. The Social Security Administration has yet to reach the same conclusions as the Internal Revenue Service. Regardless, it is important that you educate yourself and make informed decisions now that can affect you in the future.
Social Security is a federally mandated monetary system that provides assistance to citizens who have lost income, whether by retirement, disability or death. As of 2013 about 157 million people in the United States pay Social Security tax and 57 million collect benefits. About 25% of households receive income from Social Security.
Social Security benefits are calculated based on the income history over your working life. For retirement planning purposes, a spouse can draw income on 100% of their own benefit or 50% of their spouse's benefit. As such, your planning opportunities are greater if you have:
The Social Security Administration does not offer these benefits to all LGBT married couples. State of residence and applicable laws in that state govern Social Security Benefits. Only LGBT married couples who reside in a state that fully recognizes same sex marriage are currently eligible. Married couples who are married but do not reside in a full-recognition state should stay tuned for more guidance from the Social Security Administration. Benefits are based on the location you lived when you applied, so later moving to a state that does not recognize same-sex marriages will not affect your benefits.
Even if you are not currently eligible based on where you live, you should go ahead and submit your application for benefits. If the Social Security Administation decides to honor all same sex marriages, retroactive payments will be based on the date of application. This is a non-issue for those already living in a state that recognizes LGBT marriages.
If you think you are or will become eligible, you are encouraged to reach out to a representative from the Social Security Administation and submit the application as soon as possible. They can:
For more guidance on securing your future, consult with a financial planner.