Yesterday’s Supreme Court ruling to outlaw DOMA and legalize gay marriage in the state of California was a huge deal in the U.S. The decision means that married gay couples now have the right to receive federal benefits in the 13 states that allow gay marriage, a ruling which can foreseeably have great financial as well as emotional impact on thousands of Americans.
According to a recent Forbes article by Laurence Kotlikoff, from a financial perspective, gay couples can finally cash in on more Social Security benefits for being acknowledged a wed couple than they could as singles. Kotlikoff explained that married folk get better benefits than single folks on Social Security, particularly when it comes to receiving survivor benefits to spouses. The article states that it’s required to be married for one year to receive spousal benefits and nine months to get survival benefits.
The downside that Kotlikoff points out is that Social Security, which is already 32% underfinanced and as he puts it “seriously broke,” is going to get into even further trouble with more consumers cashing in on it. The article suggested that either taxes need to go up 32% or benefits need to be cut by 23% in order to make ends meet currently.
At SunsetFinances.com, we’re all about finding a remedy for the already-ailing issue of Social Security. This has definitely been an ongoing issue, not something new, though it could be the straw that breaks the camel’s back.