Social Security has been one of the most important social programs in the United States for decades. It provides essential income to millions of Americans across the country, especially for retirement income. After paying Social Security taxes for years, beneficiaries benefit from a kind of financial safety net.
However, these benefits are not limited to those who have worked for many years and paid taxes. For example, Social Security allows spousal benefits to support non-working and low-income spouses during retirement.3 things he needs to know for couples nearing or planning to retire and making financial plans social security spousal allowance.
1. How social security spousal benefits work
Social Security typically calculates a beneficiary's monthly benefit amount. using formulas This takes into account their 35 highest-earning years of income. However, if your spouse is over the age of 62, supports a child under 16, or has a disability, you can receive Social Security benefits based on your partner's income record.
Assuming the person claiming spousal benefits has reached retirement age, they will also be entitled to 50% of their spouse's primary insurance amount.
For example, if Spouse A's earnings record provides for a monthly benefit of $2,000 at the end of retirement age, Spouse B may receive $1,000 per month as well. The exact amount depends on the age at which Spouse B claims benefits.
2. Impact of applying for benefits early or late
Retirement age is one of the most important numbers related to Social Security because it indicates when you are eligible to receive your primary insurance amount. However, you do not have to claim benefits once you reach retirement age. You can claim it sooner (you pay less) or later (you pay more).
Claiming Social Security benefits early has a number of implications for spouses and their partners who receive spousal benefits.
First, if you look at those who claim based on their work performance, 5/9 of 1% will be reduced each month up to 36 months before reaching full retirement age. Each month thereafter, the benefit will be reduced by 5/12 of her 1%. For example: A person who reaches full retirement age at age 67 and claims benefits at age 62 will have her monthly benefit reduced by 30% of her main insured amount.
For those receiving spousal benefits, the benefit is reduced by 25/36 of 1% per month until 36 months until retirement age, and then reduced by 5/12 of 1% per month. So if someone at full retirement age (age 67) claims spousal benefits at age 62, their check will be reduced by 35%.
Typically, your benefits will increase if you wait past full retirement age, but these delayed retirement benefits do not apply to spousal benefits.
3. What happens when your spouse dies?
Social Security spousal benefits and survivor benefits can be closely related because the latter provides important financial support after a partner passes away.
If you are claiming spousal benefits when your partner dies, Social Security will convert the spousal benefits to survivor benefits. With survivor benefits, you can be eligible to receive up to 100% of your deceased spouse's benefits, including any delayed retirement credits earned by your deceased spouse before his or her death. A widow or widower can begin receiving survivor benefits at age 60 (if disabled, she is age 50), but as with spousal benefits, the amount is reduced if filed before full retirement age. will be done.
You cannot receive spousal allowance and survivor allowance at the same time; you will only receive the higher of the two. Spousal benefits are capped at 50% of her partner's primary insurance amount, so survivor benefits are usually higher.
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Spousal Social Security Benefits: 3 Things Every Retired Couple Should Know Originally published by The Motley Fool