How a Two-Income Couple can Maximize their Social Security Benefits
Everyone Needs to Do Some Planning Before Starting Their Social Security.
Preparing for Retirement
If you are a two income couple nearing retirement age, you may be getting worried about your future. With a weak economy and the loss of billions of dollars in investment portfolios in the past few years, many people who are near retirement age are wondering how they can possibly survive on Social Security. Here are a few strategies to help couples, when they have both been working and paying into Social Security over many years. These suggestions are designed to help them maximize their benefits. Of course, anyone contemplating retirement should be sure to check with the Social Security Administration for additional ideas and any rule changes. When you begin to prepare for retirement, you should make an appointment with your nearest Social Security office before you quit your jobs, in order to discuss various options. Our family has always found the employees at the Social Security Administrations to be extremely helpful.
Step One: Work as Long as Possible - Although Not Everyone Can
Perhaps the most important thing you can do to maximize your Social Security benefits is for both of you to keep working as long as you possibly can. The amount of Social Security you will eventually receive will be higher if you have worked more years; your benefits are also increased if you are older when you begin to collect, up to age 70. In addition, it is not unusual for your highest earning years to be those years just prior to retirement. Remember that the higher your earnings, the higher your benefits will be.
Of course, not everyone can work until they are 70. In those cases, it is important to work as long as you can.
Postpone Collecting Your Social Security
If one of you must stop working because of health reasons or forced retirement, postpone applying for Social Security benefits as long as possible in order to maximize what you will receive. Living on one income may help you both prepare for the reduced income you may be living on once you begin to receive your Social Security. In addition, the longer you postpone collecting your Social Security benefits, the larger they will be. Waiting as long as possible is a smart move for those who are able to hold off.
Legal Tricks to Increase Your Social Security
The blog, Baby-Boomer-Retirement.com, frequently discusses ways that individuals and couples can increase the amount of retirement income they can expect. One way to do this is by maximizing your Social Security Benefits. There are also some tricks that have helped millions of people be able to collect extra Social Security benefits. Unfortunately, although the tricks listed below are all legal, many people have not benefited from them, because they do not understand how Social Security can work for married couples with two incomes.
If one spouse files for Social Security first, the other spouse can apply for spousal benefits, which are a portion of their partner’s Social Security. Depending on their age when they start taking the benefits, they can receive an amount that is between about one-third and one-half of their spouse’s benefits. They will still let their own Social Security benefits continue to grow, since they are not using their own benefits, yet. When they reach age 70, they can decide whether they are better off using their own Social Security benefits, or if the portion of their spouse’s benefits that they have been receiving is greater. You are entitled to collect the larger amount.
This is how the plan would work: If the husband files for Social Security at his full retirement age of about 66, he might receive about $1500 a month. If his wife is at her full retirement age of about 66, she would get half that, or $750. If she is between the ages of 62 and 66, she could still collect a percent of her husband’s Social Security, although it would be less. In addition, because he is over 66, he can continue to work until he is 70, which will increase the Social Security benefits for both of them. If the wife was at her full retirement age when she began collecting a percentage of her husband’s benefits, she could also keep working and let her own benefits grow. If she works and collects money from Social Security at the same time, before she reaches her full retirement age, her benefits may be decreased, depending on the amount of money she earns. After she reaches full retirement age, however, she can continue to work and receive a check at the same time, without a penalty. Once she reaches age 70, she would then stop taking the spousal benefit and begin to take her own Social Security, as long as her own benefits were higher than the amount she was receiving from her husband’s benefits.
Another approach is for both the husband and wife to postpone collecting their benefits and continue working until they are 70, which will allow their Social Security benefits grow to the maximum. The amount that they would collect at age 70 would be about one third larger than it would have been if they had collected their Social Security benefits at age 66. When they both retire, the wage earner who earned the least can either receive their own benefits or one-half of their spouse’s benefits, whichever is greater.
In addition, if the spouse with the larger Social Security benefit dies first, the surviving spouse would have his or her benefits increased to the amount that the deceased spouse was receiving, although they would no longer get their own benefits as well. You can only collect the benefits of one person. However, getting the step-up to the pension of the larger wage earner helps the person who earned the least, if they should become widowed.
Use this information to get the most out of your Social Security benefits. For additional assistance, you can experiment with a variety of retirement options by using the Social Security Administration’s on-line calculator at socialsecurity.gov. It will help you make a more educated decision about the best time for you to retire.
Learn All You Can About Social Security - It Can Make a Huge Difference in What You Receive
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