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When Should You Claim Spousal Benefits
While this is a personal decision, you cant claim spousal benefits before age 62. If you opt for sometime after reaching age 62 and before your full retirement age, youre likely to see your benefits reduced.
And if you wait until after your full retirement age, benefits wont increase. The wage earner may benefit from delaying benefits until age 70, but the spouse applying for benefits wont.
For those looking to max out their spousal benefit, one course of action is obvious.
The best strategy to claim Social Security retirement benefits as a spouse is to wait until you reach normal retirement age, 65 to 67, depending on birth year, says Lindsay Malzone, a Medicare expert at website MedicareFAQ. Unless you currently care for a qualifying child, you will receive a reduced benefit if you have not yet attained normal retirement age.
But there are exceptions to this general rule, especially if you believe your longevity is an issue.
We usually start by considering health: How long did the same-sex parent live and whats the current health situation for both partners, Ward says. Those with long expected life spans and good health are usually best off waiting until the maximum benefit is available. Those with shorter life expectancies or poor health may be better off starting sooner. Those with a terminal illness can file as of six months ago and start receiving payments immediately and collect a check for those missed payments.
How Will My Retirement Benefits Be Taxed
Approximately one-third of people who collect Social Security benefits are required to pay income taxes on these benefits. Individuals with higher total incomes must include up to 85% of their benefits as income for federal income tax purposes, designated by special step-rate thresholds. However, the taxation thresholds for your benefits arent currently indexed for inflation.
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Who Qualifies For Spousal Benefits
Benefits are available to spouses married for one year or longer. To qualify, you also have to be at least 62 years old and have a spouse who is currently receiving benefits based on their indexed wages. You can also receive a spousal benefit at any age if you’re caring for theand the child is younger than 16 or became disabled before age 22.
Ex-spouses can also receive these benefits after a divorce if the insured spouse is eligible for retirement or disability benefits through Social Security, the marriage lasted at least 10 years, and the ex-spouse is both unmarried and at least 62 years of age. If you have not applied for retirement benefits, but can qualify for them, your ex-spouse can receive benefits on your record if you have been divorced for at least two continuous years.
The SSAin all 50 states as well as certain nonmarital relationships, including civil unions and domestic partnerships. Therefore, same-sex couples and others in these legal relationships are able to receive spousal benefits.
Note that Social Security uses a separate payout calculation for widowed spouses. For that, you’ll need toinstead of spousal benefits. If your married partner recently passed away, it’s important to notify the SSA immediately so you can receive the proper benefit.
Divorcing You May Still Be Able To Get Their Benefits
If you were married for at least 10 years and youve been divorced for at least two years, you can claim your exs Social Security. The same spousal rules apply: Your maximum benefit will be 50% of their primary amount. Youll receive a lower amount if you claim early, and you wont earn delayed retirement credits for waiting past your full retirement age.
Your ex-spouse needs to be at least 62 for you to claim on their record. Your decision will have absolutely no effect on your ex-spouse. Likewise, if someone youve divorced takes Social Security on your record, your benefits wont be reduced.
Claiming Social Security Benefits At The Right Time Means More Money In Your Pocket Heres A Guide To Everything From Knowing Your Full Retirement Age To Taking Social Security Spousal Benefits
When youre years away from retirement, Social Security seems straightforward: Youll leave your job, file for benefits and receive a monthly check for the rest of your life boom! But in reality, getting the most out of Social Security is anything but simple. As you near retirement, the decisions you make could have a significant impact on the amount of money you receive, and some of these choices are irrevocable. Youll need to move carefully to maximize this income stream.
Here are 12 essential details you need to know.
Divorced Know This Significant Exception To The Rule
When planning your Social Security filing strategy, its important to note that you cannot file for a spousal benefit until the higher earning spouse files for their benefit.
But this does not apply if your are filing for a spousal benefit from an ex-spouse.
If your ex-spouse has not applied for retirement benefits you can receive benefits on his or her record if you have been divorced for at least two years and your ex-spouse is at least 62.
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Crunch The Numbers To Determine When To Start Social Securitys Spousal Benefit
Before I retired from financial planning, one of the common questions I was asked by clients was whether to begin their Social Security benefit based on their or their spouses work record and whether or not that decision could be changed later.
When one of a married couple attains at least age 62, they can begin a Social Security benefit based on their work record or a percentage of their spouses benefit. But exactly how does this work? An example will help to clarify this.
Jerry and Alice are ages 65 and 62, respectively. Jerrys Social Security primary insurance amount of $2,500 per month. If Alice does not have enough employment credits to receive her own retirement benefit, she is still entitled to 50% of Jerrys benefit, or $1,250 per month, if she begins this spousal benefit when she attains her full retirement age. Alice was born in 1958, so that will be age 66 years and 8 months.
Alice cannot begin this spousal benefit until Jerry begins to collect his Social Security benefits. It is also noteworthy that whatever Alices spousal benefit amount is, it has no bearing on the calculation or amount of Jerrys benefit.
However, if Alices monthly benefit amount is greater than 50% of Jerrys monthly benefit, there will be no excess spousal benefit amount added to her benefit when Jerry begins his at age 70.
How Much Will Your Divorced Spouse Receive
If you have not applied for retirement benefits, but can qualify for them, your ex-spouse can receive benefits on your record if you have been divorced for at least two continuous years.
If your ex-spouse is eligible for retirement benefits on their own record, we will pay that amount first. If the benefit on your record is higher, they will get an additional amount on your record so that the combination of benefits equals that higher amount.
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How Long Does My Spouse Have To Work For Me To Receive Social Security Spousal Benefits
Your spouse must have at least 10 years of work, or 40 credits, in order to receive any Social Security benefits or for you to receive them. The years of work don’t have to be concurrent, and up to four credits can be earned per year. Your spouse must earn a certain amount in order to receive one credit, and that amount changes every year. In 2022, anyone eligible for benefits must earn $1,510 to receive one credit. To earn the full four credits in the year, a worker must earn $6,040.
Find Your Social Security Full Retirement Age
You can claim your Social Security benefits a few years before or after your full retirement age, and your monthly benefit amount will vary as a result. But first you have to know what it is.
Also known as normal retirement age, your Social Security Full Retirement age is the age at which youre entitled to 100% of the Social Security benefits youve earned. FRA is 66 for beneficiaries born between 1943 and 1954 it gradually increases to 67 for beneficiaries born in 1960 or later. If you take benefits before FRA, your benefits will be reduced. If you file at age 62, for example, benefits will be as much as 30% lower. More on that in a moment.
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Your Monthly Social Security Benefits Increase The Longer You Wait To Claim
While you can collect Social Security benefits as soon as you turn 62, taking benefits before your full retirement age will spell a permanent reduction in your payments of as much as 25% to 30%, depending on what your full retirement age is.
If you wait until you hit full retirement age to claim Social Security benefits, youll receive 100% of your earned benefits. But you can do even better by waiting to claim your Social Security benefits at age 70 your monthly Social Security benefit will grow by 8% a year until then. Any cost-of-living adjustments will be included, too, so you dont forgo those by waiting. Think of that time as bonus earning years and remember that youd be hard pressed to find those sorts of gains for zero risk during that period anywhere else.
Waiting to claim your Social Security benefits can help your heirs as well. By waiting to take her benefit, a high-earning wife, for example, can ensure that her low-earning husband will receive a much higher survivor benefit in the event she dies before him. That extra income of up to 32% could make a big difference.
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More Than Just Income: The Social Security Spousal Benefit And Medicare Coverage
If you are eligible for a Social Security spousal benefit, you are also entitled to premium free part A Medicare at age 65. The catch?
Youre entitled to Medicare only if your spouse is at least 62 years old.
If you are more than 3 years older than your spouse, you may have to buy Medicare Part A until your spouse turns 62. Thats when your premium-free benefit would start. The Part A monthly premium is $422 in 2018.
What Are Social Security Spousal Benefits
The Social Security Administration pays a monthly benefit to adults age 62 or older based on the annual earnings they accrued during their working years. The SSA indexes these earnings, meaning it averages out a person’s highest annual earnings for up to 35 working years. The program uses this information to calculate a primary insurance amount that will become the basis for their benefit amount.
You can also receive a monthly payout based on your partner’s PIA, even if you’ve never worked a job where you had Social Security taxes withheld. As long as your spouse is already receiving benefits under the program and you meet the other eligibility criteria , you can receive this important income support.
As with other Social Security retirement benefits, you can start receiving spousal payments through the program as early as age 62. However, you get a larger monthly benefit if you wait until your normal retirement agethat threshold isdepending on the year of your birth.
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How Much Can Spouses Get From Social Security Each Month
When you are the spouse of an insured individualone who has worked and paid into the Social Security systemthe maximum amount you can receive is half of their benefit. However, you only receive 50% of their benefit if you wait until your full retirement age to receive benefits. If you start receiving benefits between age 62 and your full retirement age, the spousal benefit is reduced on a proportional basis.
For example, an insured individual born after 1960 would receive 70% of their SSA-calculated benefit if they applied for benefits at age 62and their spouse would receive 32.5% of their benefit. If the primary recipient started receiving payments at age 65, they’d get 86.7% of their calculated benefit and their spouse would be eligible to collect 41.7% of that amount.
Keep in mind that any spousal payment you receivethe insured spouse’s Social Security retirement benefit.
What Happens If One Spouse Dies
If your spouse passes away, you can collect a survivors benefit as early as age 60. You will be able to get the maximum benefit, or the full amount of your spouse’s monthly Social Security payment if youve reached FRA.
Before that, its reduced by 71.5%-99%. The amount it’s reduced by depends on how many years over 60 you are.
If you are the surviving spouse, you can restrict your application to file for either your own benefit or the survivor benefit. Later, you can switch to the other amount.
You might do this if your own monthly payment at age 70 would be larger than your spouse’s payment. You could claim the spousal benefit for several years, and then at age 70 switch to your own benefit.
If you are divorced and your ex-spouse dies, you might be able to get the same benefits as any current spouse. This is true if your marriage lasted at least 10 years or you are caring for a qualifying child.
Once you and your spouse have started getting Social Security benefits, the surviving spouse will have to choose one benefit. You can take either your spouse’s monthly payment or your own. You cannot get both.
If you live in the same household when your spouse passes away, you will also be able to get a one-time lump-sum payment of $255.
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What Is The Maximum Spousal Social Security Benefit
The maximum spousal benefit is 50% of the amount that the spouse is eligible to receive at full retirement age. That’s a cap, by the way. If your spouse delays retiring until 70, the spouse gets more, but you don’t.
Survivors may receive up to 100% of the deceased person’s Social Security amount. There’s a complicated formula for families in which more than one dependent is eligible for benefits. It caps the maximum.
How Do I Apply For Spousal Social Security Benefits
You can apply when your insured spouse files for Social Security or at any time after they’ve started to receive monthly payments. Going online and filling out theis the easiest way for most applicants. When you and your spouse apply online at the same time, the SSA automatically checks your eligibility for spousal benefits.
When applying online, you may be asked for certain documents, including but not limited to:
- Your birth certificate or other proof of birth
- Proof of U.S. citizenship or lawful alien status
- A copy of your U.S. military service papers
- A copy of any W-2 forms or a self-employment tax return for the prior year
or call 772-1213.
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Calculating Social Security Spousal Benefits
Spousal benefits are based on your spouses primary insurance amount, which is the amount theyre eligible for at full retirement age . Depending on how old you are when you start Social Security, you can receive 32.5% to 50% of your spouses benefit.
If you wait until your full retirement age which is 67 if you were born in 1960 or later youll qualify for the 50% maximum. But if you claim as soon as youre eligible at 62, youd only receive 32.5% of their full benefit.
When you take your own retirement benefits, you can earn 8% delayed retirement credits for each year you wait past your full retirement age until you reach your benefit cap at age 70. However, you cant earn delayed retirement credits when youre taking spousal benefits. Youll receive your maximum benefit once you reach full retirement age.
You also wont earn extra if your spouse waits past their full retirement age. The rules are different for surviving spouses, as well discuss shortly.
If you take spousal benefits, you wont affect the benefits your husband or wife receives. Their benefit is based solely on their primary insurance amount and when they claim.