Allworth Advice | How does my wife get some of my Social Security?

Every week, Allworth Financial’s Amy Wagner and Steve Hruby, CFP ^® , answer your questions. If you, a friend, or someone in your family has a money issue or problem, feel free to send those questions to yourmoney@enquirer.com .

Dave from Boone County: Will my wife automatically get some of my Social Security when I file for mine?

Answer: We believe you’re referring to what the Social Security Administration calls its spousal benefit. Basically, assuming a spouse meets a few eligibility requirements, they are entitled to receive up to 50 percent of the ‘primary’ spouse’s full benefit.

For example, let’s say you’ll get $2,000 a month at your Full Retirement Age (FRA). This means, once you’ve filed for your benefits, your wife would be eligible to receive up to $1,000 a month if she claims the spousal benefit at her FRA. This amount will be permanently reduced if she claims earlier; and waiting past her FRA does not increase the benefit. It’s also important to note that if she is receiving a benefit based off her own work record, the Social Security Administration will pay out whichever is larger.

As for if she would receive this benefit automatically, the answer is no. She would need to file for her spousal benefit with the Social Security Administration. This can be done at ssa.gov or by calling 1-800-772-1213 (TTY 1-800-325-0778).

The Allworth Advice is that determining when to claim a spousal benefit is a critical part of any retirement plan, so make sure the two of you put serious thought into the timing. If you need help with this decision, consider reaching out to a fiduciary financial advisor.

Jen in Anderson: My son is 17 and wants a new car. He has a few thousand saved for the down payment. Any tips for him (and me)?

Answer: One of the biggest pieces of advice we can share is to temper your son’s expectations. His definition of a ‘new car’ could be drastically different (and more expensive) than your definition. So, help him put his budget into perspective; even if you’re helping out a bit with the purchase, it’s unlikely he’s going to be able to afford a brand-new sports car, right? Help him understand what his money will be able to realistically buy.

With that said, even used car prices are still pretty high – the average financing amount right now is about $28,000 according to The Washington Post . Yikes. But the good news is that there are still vehicles available for less; he just might have to do a little research. He can start with browsing reputable websites such as Kelley Blue Book, Edmunds, and CarMax. If he strikes out there and your family knows a local mechanic, they might be able to put some feelers out for him.

If financing is needed, keep in mind that the loan will have to be in your name since he’s a minor (we don’t typically recommend co-signing). Try your best to stick to the 20/10/4 rule: Make a 20 percent down payment; no more than 10 percent of his total monthly income should be spent on transportation costs; and the loan term should be no longer than four years (48 months). And as this rule reminds us, there are other expenses that come with owning a car besides the purchase price (gas, maintenance, insurance, etc.). Have a discussion with him so the both of you understand what he’ll be paying for versus what you’ll be willing to cover.

Here’s the Allworth Advice: Buying that first car is a true American coming-of-age rite of passage. Use this milestone to help your son responsibly think through what’s likely his first big financial decision – it’s a lesson that can serve him well for the rest of his life. Good luck!

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. Retirement planning services offered through Allworth Financial a SEC Registered Investment Advisor. Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Visit allworthfinancial.com or call (513) 469-7500.

This article originally appeared on Cincinnati Enquirer: Allworth Advice | How does my wife get some of my Social Security?