There is a Social Security rule that could help thousands of retirees get the highest monthly benefit. However, this rule is ending this year. If you are a retired worker in the US, you need to learn about the Social Security Spousal Rule and how you can use it to get a $4,873 monthly check before it’s too late.
The Social Security Administration (SSA) gives billions in benefits to those who qualify for retirement, survivor, and disability insurance (RSDI) or Supplemental Security Income (SSI).
Understanding the Social Security Rule
What You Need to Know About the Social Security Rule
The Social Security spousal benefit rule, which has been around for decades, is ending this year. This rule allowed people to switch between their benefits and their spouse’s benefits to get the maximum amount. However, only those born before January 1, 1954, can still use this rule.
When the rule expires, the spouse who earned more would claim spousal benefits at full retirement age, while the other spouse would claim their benefit at the same time. The higher earner would then start receiving benefits at age 70, getting the most out of each month’s payment.
The lower-earning spouse might keep their benefit or claim a spousal benefit, depending on whose income is greater. With this rule ending, new plans are needed to maximize your benefits.
Strategies to Get the Maximum Monthly Benefit
Planning for Retirement in Advance
To get the most out of Social Security spousal benefits, you need to discuss who should get payments and when. Social Security always pays the higher of an individual’s benefit or a spouse’s benefit to the lower earner.
Couples should register for an online account with the SSA to check their expected benefits at different claiming ages. According to Matthew Allen, co-founder and CEO of Social Security Advisors, planning is key.
Claiming Benefits Before Full Retirement Age
Claiming benefits before full retirement age might not be the best idea. Your Social Security benefit depends on your work history and when you claim it. You can start receiving benefits as early as 62, but full retirement age for most is now 67.
If you claim early, you will get a 30% permanent reduction in benefits. For example, if your retirement benefit is $2,000 at age 67, claiming at 62 would reduce it to $1,400. Your spouse’s benefit will also be reduced if they claim at age 62.
Delaying Benefits Until Age 70
Generally, your payment will be larger the longer you wait to start receiving Social Security retirement benefits. You will get the full benefit at full retirement age and the maximum benefit if you wait until 70. Those who claim early, such as at age 62, will see a reduction, while those who wait will see an increase.
However, spouses do not benefit from the age 70 rule because their payout is limited to 50% of the primary beneficiary’s full retirement age benefit. Even if your spouse waits until 70, your maximum benefit would still be 50% of the primary beneficiary’s full retirement age benefit amount.
With the Social Security spousal benefit rule ending, it’s crucial to understand the changes and plan accordingly. Discuss your retirement plans with your spouse, and use the SSA’s tools to estimate your benefits. By making informed decisions, you can maximize your Social Security benefits and ensure a more secure retirement.
FAQ
What is the Social Security spousal benefit rule?
It allows people to switch between their benefits and their spouse’s benefits to get the maximum amount.
Who can use this rule?
Only those born before January 1, 1954, can still use this rule.
What happens if I claim Social Security benefits at age 62?
You will get a 30% permanent reduction in benefits.
What is the full retirement age for most workers?
The full retirement age for most workers is now 67.
Do spouses benefit from waiting until age 70 to claim Social Security?
No, spouses do not benefit from the age 70 rule because their payout is limited to 50% of the primary beneficiary’s full retirement age benefit.