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Before you claim Social Security early, you’ll want to think about how this decision will affect your spouse’s benefits.
First, not all early filers can immediately access these benefits – and for those who can, the decision may not mean receiving a huge monthly check. It is also easy to misunderstand what you are entitled to as a spouse.
David Freitag, social security expert and financial planning consultant for MassMutual, said the reason for the confusion is that the rules that apply to spousal benefits for anyone born after January 1, 1954 have been changed under ‘a law of 2015. has been given.
“That’s when all the creative file went to the young people [beneficiaries]”said Freitag.
While it may seem complicated, there are two things to remember about spousal benefits in general:
- It is capped at 50% of the benefits your spouse receives at full retirement age; And
- You cannot claim these benefits unless your spouse is already on social security.
It is also important to note that if your spouse dies, you will be claiming survivor benefits, not spousal benefits. And if you were born before the 1954 deadline, you may have other strategies available to you as a spouse.
You may find that if you apply before your full retirement age (as ruled by the government), your own Social Security benefits are reduced, depending on your year of birth, currently 66 or 67. (Likewise, claiming any time after that age means your benefits will be higher, increasing an average of 8% per year until age 70.)
The earliest you can apply for benefits is age 62. However, filing early bills will go hand in hand with any spousal benefits you’re entitled to, Freitag said.
And it doesn’t matter whether your spouse applied early or waited until full retirement age (or later).
The amount of the deduction is greater than what you previously claimed.
For example, let’s say your spouse’s monthly benefit at full retirement age is $ 2,000, so 50% – the maximum you might be eligible for if you waited to produce – is $ 1,000. .
If you decide to apply for Social Security at 62, your spousal benefit will be $ 650, or 35% less, said certified financial planner Peggy Sherman, senior advisor at Briaud Financial Advisors in College Station, Texas. .
Also note that you will not benefit from both your own records and that of your spouse – you will get more of both. Using the scenario above: If your monthly benefit at age 62 is less than $ 650, you will receive $ 650. If your benefits were higher, you would not receive any spousal benefits.
You also don’t need to file any additional claims to see if spousal benefits will give you a monthly boost – you’re automatically considered to be applying as a spouse.
If you don’t have a work history to qualify, you can get the spousal benefit with the same maximum claim of 50%.
In addition, if your spouse claims beyond the full retirement age, which means that his or her benefits will continue to increase, the maximum of 50% applies to the amount of the retirement age at full pension. full rate, not the higher spousal benefit.
During this time, if your spouse is not already receiving benefits and you apply for yourself earlier, you are not yet eligible for spousal benefits.
When your spouse submits your file, you will be eligible for spousal benefits. However, because you deposited early, you still won’t be entitled to the full 50%.
“The spousal benefit would be even lower because you claimed early,” Sherman said.
In other words, the only way to qualify for 50% of full retirement age is to wait until full retirement age – and that’s true even though your spouse filed an application earlier, Sherman said. .
If you are divorced and the marriage lasted at least 10 years, you can claim your ex-spouse’s file as long as you have not remarried. The same maximum of 50% will apply: if this part exceeds your own benefits at the time of deposit, you will get a higher amount. (And, no, that has no effect on your ex’s benefits.)
During this time, if your spouse dies, you will be entitled to survivor benefits, which are usually 100% of the amount your spouse or husband receives. If the amount exceeds your monthly payment, you will receive a higher amount.