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Some Vital Facts That You Need To Know About Social Security Spouse Benefits
When most of the 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, so when you are planning for retirement, it is important to think about the fact that you or your spouse might get Social Security survivor benefits or spousal benefits at few points in their life.
Here, we are going to talk about the fundamentals of Social Security spousal benefits.
Basically, a married person could get a spousal benefit equal to half of her husband's basic benefit, also labeled the PIA (primary insurance amount).
Social Security spouse benefits generally come into play when a spouse takes time away from work to raise a family, and therefore has little or no income.
Calculating the Spousal Benefit:
The spousal benefit is in fact a combination of both spouses' benefits. If a married person has enough credits to be eligible for Social Security on her own, then her credit will be figured first. If it is lower than her spouse's benefit, she will get her benefit plus an adjustment to equal half of her husband's primary benefit.
When Should You Begin the Spousal Benefit:
You could apply for the spousal benefit as early as age 62, as long as the working or more earning spouse is eligible and has applied for benefits.
It does not good for the lower earning spouse to wait beyond her complete retirement age to apply for spousal benefits as the spousal benefit won't earn credits beyond the full retirement age. So, spouses applying for the spousal benefit must do so when they reach full retirement age.
How Early Retirement Impacts The Spouse Benefit:
Spouses who apply for the spousal benefit before she is complete retirement age will get a reduced benefit exactly 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 age 62 and switches to her own benefit at complete retirement age.
Some other Considerations:
Persons who begin collecting retirement benefits before complete retirement age can just earn up to a definite amount before they have to pay back part or all of their Social Security benefits. In 2009, that amount is $14,160. If you earn higher than $14,160, you require to pay back $1 for every $2 you earned over the limit.
This earnings test applies to spousal & survivor benefits and also retirement benefits, so if you expect to work before you reach complete retirement age, you must delay your retirement and spousal benefits.
In this article, I've referred to the wife as the lower earning spouse out of simplicity. However, in today's world, it is not uncommon for the wife to be the higher earning spouse. The great news is that Social Security is gender neutral, so the Social Security spouse benefits can apply to the wife or husband, and also the higher or lower earning spouse.
How Social Security Spousal Benefits Work
Can a spouse collect on her husband's social security if she reaches retirement age before her husband? No. In order for a wife to collect Social Security benefits on her husband's earnings the following requirements must be met:
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