Retirement planning can be as delicate as a game of chess. Decisions made in these crucial years of life can determine the amount you receive in benefits. For many married Americans, the option of leveraging a spouse’s earnings history for higher Social Security benefits is like finding an unexpected ace up your sleeve. However, the named game only pays off if you’re strategic with the timing.
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The Rationale Behind Social Security Spousal Benefits
When planning for retirement, the 50% spousal benefit rule at full retirement age (FRA) could be a game-changer, especially if one’s individual work history didn’t lead to substantial earnings. The key is a higher-earning spouse who has claimed retirement benefits.
Timing is everything. If a spouse claims Social Security benefits early, both partners’ benefits could take a hit, unless there’s a qualifying child involved. Starting to receive spousal benefits before the FRA also results in reduced benefits, with nuances for those caring for a qualifying child.
The Cost of Delaying Spousal Benefits
Delaying retirement is like investing in fine wine—patience is lucrative. The SSA sweetens the pot with an 8% increase per year, up to three years, for retirees who defer claiming benefits. But here’s the catch: your spousal benefits don’t get a sip of this aged wine. They max out at 50% of your spouse’s benefits at their FRA. Waiting past your own FRA to claim spousal benefits, currently 67, may not serve your interests.
However, there is one exception. If holding off on filing boosts your retirement benefits based on your own earnings history enough to exceed 50% of your spouse’s benefit at their FRA, then the waiting game is worth playing.
Survivor Benefits: A Different Ballgame
Survivor benefits operate under a different set of rules. Waiting past the FRA to claim your survivor benefits could bolster your earnings, while initiating them early may leave you short-changed. Yet, unlike spousal benefits, survivor benefits don’t get a boost from making this strategic move. Moreover, if you already receive spousal benefits when your spouse passes away, your benefits will automatically convert to survivor benefits.
The $22,924 Social Security Bonus
If you’re playing catch-up with your retirement savings, there’s no denying that every ace up your sleeve counts. Uncover the little-known “Social Security secrets” that could potentially add $22,924 or more to your yearly income. By mastering the art of maximizing your Social Security benefits, retirement could be more than just a distant dream. Take the first step toward securing your golden years here.
View the “Social Security secrets”
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