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The laws surrounding Social Security benefits have several nuances, but some policies are clear. One is that the spouse must apply directly to begin receiving spousal benefits. That is, it is not automatic. Another fact is that a spouse will only receive spousal benefits if it is more than the benefits they would receive based on their work history. If you are self-employed, your spouse may be eligible for a spousal benefit only if they claim it and their benefit is less than 50% of your full retirement benefit: so, if your spouse’s benefit is $1,475 or less, in this case. Here are the rules to know.
A financial advisor can help you create a plan to make the most of your Social Security retirement.
Social Security provides retirement benefits to spouses of beneficiaries in the form of spousal benefits. A married or married Social Security recipient can receive up to 50% of the spousal benefit. The size of the spousal benefit is usually based on the amount you would receive if they claimed their benefits at full retirement age, which is 67 for most people.
Your wife may be eligible for spousal benefits if she is 62 years old, and you as the main earner in the marriage have already filed for Social Security benefits. There is one exception for couples who have been divorced for at least two years: They don’t have to wait for their ex to file for benefits. Another exception involves a person caring for a young or disabled child. These people can claim spousal benefits before the age of 62.
The amount of your spouse’s benefit is limited to 50% of your benefit if you take it at full retirement age. If your wife claims marriage benefits before she reaches her own retirement age, it will reduce her benefits by a percentage of her age. At age 62, for example, the maximum benefit is 32.5%, rather than 50% of the initial Social Security benefit.
For a primary wage earner with a total retirement income of $2,950, the gross income for married couples would be $2,950 times 50 percent, or $1,475. This spousal benefit cap does not change depending on whether the first recipient claims benefits. If the primary beneficiary waits to collect his or her benefit until it reaches age 70, for example, the spouse’s maximum benefit is still half of their retirement age of $2,950.
If your wife claims spousal support before reaching her full retirement age (remember, usually age 67), most of your spousal benefits can be reduced. For example, if he filed for benefits at age 62, the $1,475 maximum would be reduced by 32.5% to $991.20.
It is also possible that the Social Security Administration (SSA) rules that the spousal benefit is not eligible at all. For example, if your wife’s work record gives her a benefit of $1,000 a month at age 62, her own benefit would be higher than $991.20 which is the most they will be able to receive after applying the 32.5% reduction to the spousal benefit. . In this case, since she is eligible for benefits based on her work record, the SSA may not approve her husband’s benefits.
The age of the primary beneficiary when claiming Social Security benefits can also be a factor. If the $2,950 benefit is based on their will at age 70, the maximum benefit amount for each of them would be less than $1,475. That’s because the spousal benefit cap is set based on the primary beneficiary’s benefit at full retirement age, which may be lower than the benefit at age 70.
Your individual circumstances can determine the best course of action for your Social Security benefits. Consider using this free tool to connect with a financial advisor and discuss your goals.
A spousal benefit is usually paid after you as the primary breadwinner begin receiving benefits and your spouse calls Social Security to determine eligibility and claim spousal benefits. Eligibility is usually dependent on your spouse being at least 62 years of age. The amount of the benefit is equal to half of the full pension and may be less if your wife has not yet reached retirement age. And the spousal benefit may not be paid at all if your spouse is eligible for a higher benefit based on her work record.
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