Summit Social Security Snippets
» Article by AMANDA PATE, CFP®, CLIENT RELATIONSHIP MANAGER
8 Tips to help you get the most out of your Social Security benefit:
Earned & Entitled
To obtain Social Security credits, the Social Security Administration reviews at the amount of money you earn from work on which you have paid Social Security payroll tax. You must work for at least ten years and earn a minimum of 40 credits. The earnings amount needed per credit in 2018 is $1320, and four is the maximum number of credits you can earn in one year.
The item that drives your benefit amount is based on the highest 35 years of earnings. If you have zero earnings within the 35-year calculation, your retirement benefit will be reduced. This is why it is essential to check your earnings history on your Social Security Statement to catch any earnings inaccuracies before applying for benefits.
Social Security Retirement Benefits can start as early as age 62. Disability benefits may start even sooner if you have a debilitating illness or injury that prevents you from working.
You may be entitled to Social Security Retirement Benefits on not only your own work record but as a spouse. You must be married at least one year to claim benefits as a spouse. Same-sex couples are entitled to the same Social Security benefits as heterosexual couples.
Depending on your age at the time of a claim, your spousal benefit could be as much as one half of your spouse’s benefit. In most cases, the benefit you will receive will be the higher of the two – your work-record-driven benefit amount or your spousal benefit amount.
Collect on Your Ex
For the single divorcee, previously married for at least ten years, you may be able to collect Social Security Benefits on your ex-spouse earnings record. If you and your ex-spouse are both over the age of 62 years old and divorced for at least two years, you can collect benefits as an “independently entitled spouse” even if the ex-spouse has not yet claimed benefits.
If you were born on or before Jan. 1, 1954, you are eligible to claim only spousal benefits on your spouse’s earnings record when you turn 66, allowing your own retirement benefits to continue to grow by 8% per year up to age 70.
Younger workers do not have this choice. Whenever they file for Social Security, they will be “deemed” to file for all available benefits and paid the higher of the two amounts.
If your spouse is collecting either Social Security retirement or disability benefits and you are caring for their minor child under age 16 or permanently disabled adult child, you may be eligible for a spousal benefit regardless of your age. Once the youngest child turns 16, you will lose your benefits until you qualify for retirement benefits as early as age 62.
Survivors Have Choices
If you are entitled to a Social Security retirement benefit on your own earnings record, and you are a surviving spouse, you can choose whether to collect your retirement or survivor benefit first. Later you can switch to the other benefit if it would result in a more substantial amount. Reduced survivor benefits are available as early as age 60.
Anyone who collects any Social Security benefits — as a worker, spouse or widow — before full retirement age while continuing to work could lose some or all of their benefits to the earnings test. They would forfeit $1 in benefits for every $2 earned over $17,040 in 2018. Any benefits lost to the earnings cap would be reinstated at full retirement age in the form of higher monthly benefits.
Newest Suspension Rules
If you are collecting benefits on your spouse’s earnings record and your spouse decides to suspend benefits at full retirement age to earn delayed retirement credits, keep in mind that your spousal benefits would stop, too.
Under new rules that took effect in 2017, anyone can still suspend benefits at full retirement age, but no one can collect benefits on that worker’s record during the suspension. There is an exception for divorced spouses. If an ex-spouse suspends benefits, it will not affect the benefits of a former spouse.
At Summit, we look to maximize your Social Security benefits by analyzing your retirement plan and cash flow needs. We can develop personalized strategies for our clients to optimize the benefits they may be entitled to receive. If you have any questions about your current situation or simply would like validation on your benefit status, we look forward to having the conversation.