The Social Security Spousal Benefit
Many near-retirement couples are unaware of a special Social Security spousal benefit, which can be especially helpful when one spouse retires and the other continues working.
How does it work? As an example, Dolores retired at age 62, and collects $2,000 a month. Her husband, John, the higher earner in the family, is turning 66 and is eligible for the maximum monthly benefit when he retires. John would like to continue working until he is 70, so he chooses to put off collecting his own benefits, and instead takes the spousal benefit of $1,000 a month (The spousal benefit is typically half of the lower wage earner’s benefit, but may be lower in some circumstances). By doing so and continuing to work, he will collect $12,000 a year before taxes ($48,000 total when he stops working at age 70) and at the same time, will let his own benefit grow and collect the higher amount he is entitled to upon his retirement.
To qualify, you must be at least 62 years of age and your spouse must have already filed for his or her Social Security benefits. For more details and to run the Social Security numbers yourself, visit the Social Security Administration website.
The spousal benefit is often overlooked because many people think of it as the monthly payment a non-working spouse gets when his or her spouse retires. What people don’t realize is that you can collect a spousal benefit if you still work and have the larger salary.
This spousal benefit also applies to divorced couples who had been married at least 10 years. In fact, an ex-wife who didn’t remarry can claim a benefit on her former husband’s record and get 35% of his benefit at 62 or 50% at 66. The spousal benefit also applies to same-sex marriages.
To confirm your eligibility and the amount of the benefit you are entitled to, check with the Social Security Administration.
Even with the spousal benefit, if you or a loved one becomes incapacitated, the costs for long-term care can be catastrophic to your family. If you have a loved one who is nearing the need for long-term care or already receiving long-term care or if you have not done Long-Term Care Planning, Estate Planning or Incapacity Planning (or had your Planning documents reviewed in the past several years), now is a good time to plan. Learn more at The Fairfax and Fredericksburg Medicaid Asset Protection Law Firm of Evan H. Farr, P.C. website, or call us at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to make an appointment for a no-cost consultation.