How the DOMA Decision Affects Retirement Income for Same-Sex Couples

When you and your same-sex partner heard that the U.S. Supreme Court overturned the Defense of Marriage Act (DOMA) because it was unconstitutional, you cheered this victory for your civil and relationship rights. You also discovered that if you were both married to each other, you could both benefit from over 1,100 federal benefits and protections granted to opposite-sex spouses.

While the government has yet to clarify how many of these benefits affect you, especially if you live in a state that does not recognize gay marriage, some specifics regarding retirement income are emerging.

Both you and your partner are now eligible for each other’s Social Security benefits if the other dies. You can get these benefits as early as age 50 if you are disabled and your disability started within seven years of your spouse’s death. To get full retirement benefits, you must wait until the current retirement age.

You can leave each other an unlimited amount of assets and possessions upon death without any amount being taxed. Before the decision, if an estate was over $5.25 million, if was subject to a 40 percent excise tax. Speaking of taxes, you can also file a joint return to possibly benefit from a lower tax liability.

If your spouse dies before you, his or her Individual Retirement Account can roll over into your IRA without any tax liabilities. If your spouse was a federal employee with a pension and had sufficient creditable service to receive a pension, you can receive the monthly pension payments.

If you need more information on how overturning DOMA changes the retirement situation of same-sex married couples, or want to know about the latest government rulings, please contact us.

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