When it comes to planning for a long, fruitful retirement, it’s essential to understand Social Security benefits. Social Security benefits are not only available to spouses who work outside the house. Spouses who work inside the home by raising families or performing other fundamental tasks are entitled to benefits based upon their spouse’s primary insurance benefits. Understanding how spousal benefits for Social Security work and how they’re calculated can help you plan for a bright and fulfilling retirement.
Qualifying for Social Security Spousal Benefits
Qualifying spouses can receive up to half of their spouse’s retirement benefit amount. Those spousal benefits do not decrease the amount of the retiree’s benefits. Instead, they are awarded in addition if the following criteria are met:
- Your spouse must be a worker who paid into Social Security and meets the Social Security Administration’s requirements for benefits.
- You must have been married for at least one year before applying for spousal benefits for Social Security.
- You must be at least 62 years of age.
Some factors like filing before full retirement age and deemed filing can affect the net payout of benefits.
How Early Retirement Effects Benefits
While the maximum amount of spousal benefits for Social Security is half of the worker’s insurance amount, early retirement can reduce your monthly payout. Spousal benefits are reduced by a set percentage for each month before the normal retirement age, which can vary based on when you were born. However, if you have a child who is under 16 or receives Social Security disability benefits, the spousal benefit will not be reduced.
What is Deemed Filing?
Deemed filing refers to Social Security benefits between spouses that are “deemed” or required to be filed after another benefit has been requested. For example, if your spouse files for their retirement benefits and spousal benefits are available, you’ll be “deemed” as having filed for those spousal benefits. Deemed filing rules are especially important to consider if you or your spouse are retiring before full retirement age, as filing before age 70 can reduce potential incentives for delayed filing.
Previously, spouses could capitalize on incentives from postponing retirement benefits by receiving spousal benefits while allowing their own Social Security to continue growing. Deemed filing preserves the fairness of delayed retirement incentives by preventing individuals from receiving one benefit while simultaneously earning a bonus for delaying another.
Navigating Spousal Benefits for Social Security
As you put your retirement plan together, our financial advisors can help break down the intricacies of Social Security requirements and provide guidance on the appropriate time to file for spousal benefits. We are help you manage all areas of retirement planning and provide resources and tools to better understand options available to you.
For more information on Social Security benefits and retirement planning, call Davis Capital Management at:
586-930-0039 Ext. 700.