Social Security benefits are designed to augment your retirement income, helping to raise the level of financial security for those who have been part of the workforce. For many stay-at-home parents, homemakers or those who earned considerably less than their spouses throughout their career, you can enhance your level of security by obtaining post-retirement income via Social Security spousal benefits. For those that qualify, making the most of these benefits is an integral part of retirement planning.
Marriage, divorce and eligibility for benefits
Current spouses are eligible for spousal benefits. Former spouses are also eligible, provided they were married at least 10 years, did not remarry before turning 60 and have been divorced at least two years. The spousal benefit does not impact the amount of Social Security the current or ex-spouse is receiving or will receive in the future.
To file for, or receive a spousal benefit, you must be at least age 62; the exception is widows or widowers, who may file at age 60. Those currently married cannot receive a spousal benefit until their spouse files for benefits. Those who are divorced do not have to wait until their former spouse files for benefits, but the former spouse must to be at least age 62.
Amount of benefits received
A husband or wife can claim a Social Security benefit based on their own earning history, or they may collect 50 percent of their spouse’s Social Security benefits at full retirement age. As a spouse, your monthly benefit would reflect whichever amount is larger.
The earliest age at which you can begin receiving Social Security retirement benefits is 62. While many people do file at that age, you would receive a reduced amount of Social Security for the rest of your life. If both spouses apply for Social Security benefits early, they will have permanently reduced the amount they receive for the rest of their lives as well as the eventual survivor benefits for whoever lives longer.
How much difference is there? Filing at age 62 versus waiting until full retirement age (FRA) can reduce the total benefits by about 30 percent. Those who wait past their FRA, up to age 70, receive about an 8 percent increase in benefits for each year delayed. Given this wide difference in monthly payments and its potential implications to your retirement, we strongly recommend you consult with a financial advisor to validate your Social Security benefit strategy well before you consider starting your benefits.
How becoming a widow/widower affects benefits
Widows and widowers can begin claiming benefits at age 60, or 50 if disabled. However, the benefit at age 60 is reduced to about 70 percent of what they would receive at their FRA. If caring for the deceased spouse’s child under age 16, survivor benefits can be collected at any age.
If the survivor and the spouse were both receiving Social Security benefits, the survivor will continue to receive whichever benefit amount was larger. If the survivor had not previously filed for Social Security, they can claim the survivor benefit for several years, and then switch to their own benefit at 70.
Social Security is a critical source of income for many retirees and their spouses. It should be factored into retirement planning and discussed with a financial advisor to ensure that you optimize the timing and that you maximize every benefit available. Please contact our office for additional help and insight on social security benefits.
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