Social Security benefits are crucial in providing financial security for American retirees. For married couples, the program offers the possibility of receiving dual benefits, either because both spouses have worked or through spousal and survivor benefits. However, there are several factors that can unintentionally reduce the amount your spouse receives. Here are three important considerations to keep in mind.
# 1 Delaying Benefits
One factor to be wary of is waiting to claim your own retirement benefits. If you qualify for retirement benefits, your spouse can claim spousal benefits regardless of their own work history. Usually, the spousal benefit equals half of your primary insurance amount. But if you delay claiming your retirement benefits, your spouse won’t be able to claim spousal benefits either, potentially resulting in the loss of crucial income.
#2 Taking Benefits Early
On the flip side, claiming your own retirement benefits early can also impact your spouse’s future survivor benefits. After your passing, your spouse is entitled to survivor benefits based on your work record. By delaying your own benefits until after your full retirement age, you can increase the amount your spouse receives in survivor benefits. In contrast, claiming benefits early will permanently reduce the survivor benefit amount for your spouse.
#3 Working and Receiving Benefits
A further consideration for married couples is continuing to work after claiming early Social Security benefits. While some individuals claim benefits while still working, it can have consequences. If you claim early and work prior to reaching full retirement age, you may be subject to an earnings test. Exceeding specific income limits can result in forfeiting a portion of your Social Security benefits, which will also impact your spouse’s benefits if they receive spousal benefits based on your work history.
It is important to plan your Social Security strategy carefully, taking into account factors such as your ages and financial needs as a couple. Each situation is unique, and each scenario can affect both you and your spouse’s benefits in different ways. By being knowledgeable about these potential pitfalls, you can avoid any unintended financial hardships.
Any married couple approaching retirement should understand these three key factors that can affect their spouse’s Social Security benefits. Taking advantage of all available information and resources can help you maximize your benefits and provide financial security for both you and your spouse.
Be aware of the potential consequences of waiting to claim your own retirement benefits, as well as the impact of claiming benefits early on your spouse’s survivor benefits. Lastly, consider the implications of continuing to work after claiming early Social Security benefits to avoid any surprises when it comes to your and your spouse’s financial future. Remember, by being prepared and informed, you can protect your spouse’s financial security and make the most of your Social Security benefits.