For many Americans, Social Security benefits will be the mainstay of their retirement income. There are things you should know that will maximize the benefit and enhance your retirement years.
Remember that you can apply for benefits based on your own lifetime earnings or those of a living spouse, but not both. Survivor benefits are payable after the death of the spouse. The program automatically gives you the largest benefit among these options. Children are eligible for benefits, too.
Consider the age at which you want to start collecting benefits. It makes a difference in the amount you will receive. If you file before “normal retirement age” the monthly amount is decreased for life. Normal retirement age at present is 66 if you were born in 1954 or earlier and through 1960. The target age is 67 for those born in 1960 or later. There is a great financial advantage if you can delay collecting your benefits until you are 70. At that point, the monthly benefit increases by 8 percent for every year past the “normal” retirement age.
If you make a claim based on spousal benefits and later want to switch to benefits based on your own earnings, you can do so. But you must have reached your full retirement age. For instance, you may want to collect a spousal benefit from 66 to 70, then switch to personal benefits, which will have grown over those years. However, if you file before you reach regular retirement age, the program will give you the higher amount of the spousal benefit or your own, but not both.
For married couples, a wife might retire early and receive a reduced benefit. Then, when the husband reaches normal retirement age, he can file for spousal benefits for her. Then if he waits until 70 to receive his own full benefit, they have a combination of higher benefits. Before taking steps, consider your relative ages and who earned the most.
If you are divorced, you can claim spousal and survivor benefits on your ex’s earnings if you were married at least 10 years and are not currently married. After age 60, if you remarry, you can keep the survivor benefit.
If the spouse dies you can collect the larger survivor’s benefit. The amount will be larger if you can delay the request until normal retirement age. If you have significant Social Security earnings of your own, it may be wise to take the survivor’s benefit early and put off collecting on your benefits until later. Play with the numbers and get advice from an expert if you have doubts.
You can contact the Social Security Administration at ssa.gov, 800-772-1213. The AARP offers information by visiting aarp.org/sscalculator. A number of books giving detailed information and formulas can be found in a local library or at book stores.