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Social Security - Spousal Benefits

Spousal benefits allow you to receive benefits on your spouse's earning record.  Only one spouse in a marriage can claim spousal benefits. The amount of your spousal benefit depends on how old you are when you collect it. A spousal benefit is worth up to 50% of the worker's (spouse) primary insurance amount (PIA) if collected at the spouse’s full retirement age, less if collected earlier. Spousal benefits are available as early as 62. But just like retirement benefits, collecting spousal benefits before your full retirement age includes a reduction in payments. See early filing penalty.

If a spouse files for benefits before they reach full retirement age (FRA), they will incur an early filing penalty on the amount they would have received at their FRA. Suppose they can receive excess spousal benefits because 50% of their spouse's benefit is greater than their retirement benefit. In that case, they may also face an additional early filing penalty if the spouse begins to receive benefits (required for married couples) before they reach full retirement age. Both retirement and spousal benefits are permanently reduced if claimed before full retirement age.  Exception: For divorced spouses, one spouse need not be receiving their retirement benefits for an ex-spouse to receive spousal benefits on their earnings record.

For example, say Joy files for her Social Security retirement benefits at age 62. Joy's PIA, which is equal to the amount she'd be eligible for if she started drawing her benefits at full retirement age (FRA), is $600. But, Joy's benefit rate is reduced for age to $422 because she's claiming her benefits at age 62. Several years later, Joy's spouse applied for his benefits, and his PIA was $2000. Joy's unreduced excess spousal benefit would then be calculated by subtracting her PIA from 50% of her husband's PIA, which in Joy's case amounts to $400 (i.e., $2000/2 - $600). If Joy is at least FRA when she becomes eligible for her excess spousal benefit, she would then be paid the full unreduced excess spousal amount of $400 in addition to her own reduced rate of $422 to give her a combined rate of $822. But, if Joy isn't yet FRA when her husband claims his benefit, then her spousal amount would also be reduced for age based on Joy's age when her husband claims his benefits.

 At Carr Wealth Management, LLC,  anyone who sets goals for themselves qualifies to be a client. Choosing the best strategy for maximizing social security benefits is essential to planning for your future. Please contact us to schedule a no-charge consultation or if you have a question about Social Security Benefits.

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