Social Security payments might help you get by in retirement, especially if your savings are depleted. According to a 2022 Transamerica Center for Retirement Studies study, roughly one-quarter of employees expect Social Security to be their principal source of retirement income. As a result, it’s extremely vital to get the most of your benefits.
There are a few more steps you must complete whether you are married or divorced. By doing these three steps right now, you may be better prepared for retirement.
1. Determine if you are eligible for spousal or divorce benefits.
Even if you have never worked, if you’re presently married or divorced, you may be eligible for Social Security payments. To be eligible for spousal benefits, you must be 62 or older and married, and your spouse must also be eligible for Social Security payments. To be eligible for divorce payments, you cannot be married, your former marriage must have lasted at minimum 10 years, and you must be at least 62 years old.
In all circumstances, the maximum amount you can collect is 50% of what your spouse (or ex-spouse) is entitled to at full retirement age. If you are getting over that amount based on your work history, you will not be eligible for spousal or divorce payments.
Assume you are eligible to receive $800 every month in benefits based on how much you earned during your career, while your spouse is entitled to $2,000 each month at their FRA. In this example, your total monthly benefit would be $1,000.
2. Determine the age at which you will begin collecting benefits.
The earliest you may apply for Social Security is at the age of 62, but the longer you wait (up to the age of 70), the greater your monthly benefits will be. If you are married and your spouse is also eligible for benefits, you should plan when each of you will start claiming. For example, one of you may file at 62 to enhance your income earlier in retirement, while the other waits until 70 to benefit from the bigger payments.
Even if you aren’t married right now, you should consider when you want to file. There is no right or wrong answer, but your choice will affect your monthly income for the remainder of your retirement.
If you have a sizable nest egg and want to get a head start on retirement, filing early might be a wise decision. Delaying benefits, on the other hand, may be your best alternative if your funds are running low and you need to increase your monthly payments.
3. Determine your projected benefit amount.
Even if you have several years till retirement, you may verify your benefit amount by opening a mySocialSecurity account. You can then view an estimate of your future payments depending on your actual earnings.
It is simpler to plan for retirement when you know how much Social Security to expect. You’ll not only have a better picture of your future monthly income, but you’ll also be able to see if your savings are on track.
It’s best to find out sooner rather than later whether you or your spouse may be receiving less in benefits than expected. If you wait until retirement to determine your benefit amount, you may lose the opportunity to save more.
Because Social Security benefits account for a significant amount of many retirees’ income, it is prudent to maximize your monthly payouts. Whether you’re married or divorced, following these measures now will help you get the most out of your Social Security benefits.