Social Security for Spouses

May 20, 2015 | Retirement

 

After paying into the Social Security fund throughout our careers, we all want to be sure we receive the maximum possible benefits. While the program was never intended to provide your sole source of income in retirement, your benefit checks will certainly comprise an important part of your budget. That’s why we consider Social Security an important part of retirement planning, and advise clients to carefully consider all ramifications of filing for their benefits.

If you wait until your “full retirement age” (age 66 or 67, depending upon when you were born) to file your claim, you should receive the full amount of your scheduled benefits each month. This amount is based upon your earnings record. On the other hand, you can file for benefits as early as age 62, but your checks will be permanently reduced from their full amount. Or, if you choose to wait a few more years to claim your benefits, you can earn a larger monthly check. For each year that you delay your claim, up to age 70, your check will be about 7 percent larger. There is no benefit to waiting past age 70, however.

Retiring early. You may have already known that the timing of your claim will affect your benefit amount. But what you may not know is that spousal benefits are also affected by retirement age. Spousal benefits amount to 50 percent of the higher-earning spouse’s Social Security check. Therefore, retiring early at age 62, and accepting a smaller monthly check, will translate into a smaller spousal benefit as well.

Retiring late. But what if you wait beyond your full retirement age to claim benefits? Unfortunately, taking this route will not increase your spousal benefits. The higher-earning spouse’s check will indeed be higher, but accompanying spousal benefit will be the same as it would have been if you had retired at “full retirement age”.

Survivor benefits. If you’re a married couple planning your retirement, you know that it is likely one of you will pass on before the other. In this case the living spouse can file for survivor benefits from Social Security. This benefit amount is based on the age of the surviving spouse, but the rules for calculating the exact figure are complicated. To best protect yourself and your spouse, schedule a personal consultation with a financial advisor. He or she can review your financial situation, and help you formulate a solid financial plan to care for your spouse in the event of your passing.

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