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A Few Significant Facts That You Must Know About Social Security Spouse Benefits When most people think about Social Security, they normally think of retirement benefits. However about 1/5 of all Social Security benefits are spousal or survivor benefits, therefore when you're planning for retirement, it's vital to consider the fact that you or your spouse may collect Social Security survivor benefits or spousal benefits at some points in their life. Here, we are gonna discuss the basics of Social Security spousal benefits. Generally, a married person can receive a spousal benefit equal to half of her husband's basic benefit, also known as the PIA (primary insurance amount). Social Security spouse benefits usually come into play when a spouse takes time away from work to raise a family, and therefore has very little or no earnings. Calculating the Spousal Benefit: The spousal benefit is actually a combination of both spouses' benefits. If a married person has sufficient credits to qualify for Social Security on her own, then her credit will be calculated first. If it's less than her spouse's benefit, she will get her benefit plus an adjustment to equal half of her husband's primary benefit. When you should Start the Spousal Benefit: You can apply for the spousal benefit as early as at the age of 62, as long as the working or higher earning spouse is eligible and has applied for benefits. It does no good for the lower earning spouse to wait beyond her full retirement age to apply for spousal benefits because the spousal benefit won't earn credits beyond the full retirement age. Thus, spouses applying for the spousal benefit should do so as soon as they reach complete retirement age. How Early Retirement Affects The Spouse Benefit: Spouses who apply for the spousal benefit before she is full retirement age will receive a reduced benefit just like she would if she applied for her own Social Security benefit before complete retirement age. This reduced benefit is permanent, even if she takes her spousal benefit at the age of 62 and switches to her own benefit at full retirement age. Other Issues: Individuals who start collecting retirement benefits before full retirement age can only earn up to a definite amount before they have to pay back part or all of their Social Security benefits. In '09, that amount is $14,160. If you earn more than $14,160, you have to pay back $1 for each $2 you earned over the limit. This earnings test applies to spousal and survivor benefits in addition to retirement benefits, so if you expect to work before you reach full retirement age, you should delay your retirement and spousal benefits. In this article, I've referred to the wife as the lower earning spouse out of simplicity. But, in today's world, it's not uncommon for the wife to be the higher earning spouse. The good news is that Social Security is gender neutral, therefore the Social Security spouse benefits can apply to the wife or husband, along with the higher or lower earning spouse. How You Will Proceed With Social Security Survivor Benefits After Your Spouse Passes Away When Social Security was first established, it only paid retirement income to workers who qualified. It was later amended to include benefits for spouses and survivors, which made it more of a family or insurance plan, instead of just a retirement plan. Discover Tips On How To Apply For Social Security If you areapproaching retirement, you are probably already looking into how to apply for Social Security benefits. Generally, you can apply once you are within 120 days of your 62nd birthday. There are several things you should know to make the application process as smooth as possible. Prepare For Retirement-Start Saving Toady Getting ready for retirement is a lot harder than it used to be. Companies no longer offer pensions and many are reducing or eliminating matching contributions to 401K plans. In addition, Social Security benefits are expected to be smaller and you may have to wait longer to collect them. Some Key Exceptional Roth IRA Withdrawal Rules That Might Assist You To Take Money Out Of Roth IRA Roth IRAs are governed by the IRS; as such there are many Roth IRA withdrawal rules that must be followed before you take money out of your account. In this article we'll discuss Roth IRA distributions; when they can be taken, when and if they are taxable, when and if penalties might apply. 3 Ways A Financial Planner Can Help You Reach Your Financial Objectives Many people wonder exactly what a financial planner does, and how they can help you. Here are just three ways a financial planner can help you achieve your financial dreams and goals. Social Security Eligibility Rules: What Are The Requirements For A Homemaker To Qualify For Social Security? When Social Security was first established, most families only had one bread-earner, and only the working spouse qualified for retirement benefits. This caused financial difficulties for the spouse who didn't work (and therefore didn't qualify for Social Security) if the working spouse passed away first. Why Women Need To Know Regarding Social Security Spouse And Survivor Benefits When Social Security was established most women did not work. Lower or no earnings combined with a longer life span meant poverty for many women when their husbands passed away. Social Security recognized these challenges and have implemented several changes to the system to help women avoid poverty. |
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