Wading through the ins and outs of your Social Security benefits can be stressful and confusing. But we’re here to help.
Read on to learn about three little rules that could help you and your loved ones earn more money during your golden years.
Your Ex-Spouse Can Claim Your Benefits
It’s common knowledge that your husband or wife can claim benefits based on your earnings if they do not qualify on their own. But did you know that your ex-spouse can do the same?
It sounds strange, but it’s a common practice. To qualify, you and your ex must have been married for at least 10 years. They must also be 62 years old or older and they can not be remarried.
To cash in, your ex cannot be eligible for equal or higher benefits on their own or on someone else’s SS record. So if they have another ex-spouse, they may need to apply through them.
If your ex qualifies for lower benefits on their own, the SSA will pay that amount first and then use your SS record to supplement their checks until the combination of benefits reaches the higher amount.
If you and your ex choose to go this route and you have a current spouse, the payouts will not hinder their benefits.
Accepting a New Job Can Affect Your Social Security Benefits
It may be tempting to earn some side income with a part-time job once you retire from your career. But doing so may cause your Social Security benefits to decrease or completely stop.
This only happens if you apply for SS before you’ve reached your full retirement age (FRA), which is currently 67 years old.
Most people qualify for partial SS benefits starting at 62. But if you choose to cash in early, the government won’t allow you to earn more than $19,560 in extra income without getting a reduction in benefits.
In 2022, the SSA deducts $1 from your benefits for each $2 you earn above the threshold. If you will turn 67 within the calendar year, the administration will take $1 for every $3 you earn above the limit. But when you do reach FRA, you will no longer see deductions.
In total, you cannot earn more than $51,960 during the calendar year before reaching 67 years old and continue to earn Social Security benefits.
Once you reach FRA, you’re free to earn as much side income as you’d like and your Social Security benefits will not be affected.
You Can Delay Retirement Benefits to Earn More in the Future
If you choose to forego Social Security benefits at full retirement age, you can receive higher payments in the future.
As it stands, you can delay filing for benefits until you are 70 years old. And for each month you do not get a payout, your late retirement checks will increase by a certain percentage. However, this rule does not apply to you if you receive spousal benefits.
But if you are the primary beneficiary and you do not need Social Security checks when you turn FRA, it’s worth considering delaying payment so your fixed income is higher during your later years.