You’re A Surviving Spouse And Looking To Collect Survivor Benefits
Finally, if you’re married and your spouse dies, you don’t have to wait until age 62 to collect survivor benefits. As a widow or widower, you can generally claim survivor benefits based on your deceased spouse’s work history as early as age 60. If you’re disabled, then an even earlier minimum age of 50 applies.
It’s important to note that, if you remarried following your deceased spouse’s death before you turned 60, you forfeit your ability to claim survivor benefits on your deceased spouse’s work history. Instead, your only remedy is to claim any benefits available under your current spouse’s work record. However, if you remarry after you reach age 60, then you can continue to receive survivor benefits. Later on, you can switch to benefits based on your current spouse’s work history, if you prefer.
You’re Married To A Social Security Recipient And Caring For A Qualifying Child
Spouses of workers receiving Social Security can get benefits regardless of age if they’re caring for the recipient’s child. To get benefits under this provision, the child must be under age 16 and also receiving Social Security benefits.
Note that divorced spouses can also take advantage of this provision, and it even makes getting spousal benefits as a divorced spouse easier. If you’re caring for your ex-spouse’s child who is under age 16 or disabled, then your marriage doesn’t need to have lasted for 10 years or more in order to get benefits based on your ex-spouse’s work history.
Obstacles To Retiring At Age 60
Although its five years earlier than the traditional retirement age and even further from the age at which full retirement benefits are available from Social Security, 60 is close to the age at which most people actually retire. A 2021 Gallup Poll found the median age at which people retire is 62, just two years before 60.
A key reason for the popularity of 62 as a retirement age is that this is the earliest age at which most people can qualify to receive Social Security benefits. Disabled people are usually the only ones who can get Social Security payments before age 62.
People often wait after 62 to start claiming Social Security benefits. For instance, the Social Security Administration says that, in 2018, the average claiming age was 64.7 for men and 64.6 for women. The main reason is that delaying increases the monthly benefit amount.
Access to Medicare is another reason why retiring at 60 can be challenging. Except for the disabled, people dont normally become Medicare-eligible until the month they reach 65. The national healthcare program offers important assistance for coping with a potentially heavy financial burden of medical costs in later years.
Retiring at age 60 beats retiring earlier in one big way. Withdrawals from tax-advantaged retirement accounts including IRAs and 401 plans are subject to a 10 percent penalty until age 59 1/2. After that, theres no penalty, although ordinary income taxes still apply.
You May Like: Who Can Claim Social Security Benefits
Other Early Retirement Considerations
Bear in mind, you will only have to pay living expenses entirely out of investments until you claim Social Security. These benefits can make a big difference. The maximum annual benefit for people who claim at 62 in 2022, for example, is $28,368. And the maximum benefit for people who wait until age 70 to claim is $50,328. Any number of individual circumstances can significantly affect retirement age decisions. For instance, many people can count on pension income in retirement.
Life expectancy is also an important variable because it increases the number of years a nest egg has to last.
How To Plan For Future Benefits
In 2000, the average age at which people retired was roughly 61 or 62. Two decades later, it’s around 66, according to government data, Warshawsky said.
“Just in 20 years, we’ve seen a substantial increase in the retirement age,” Warshawsky said. “People really, really are working longer.”
Anecdotally, Elsasser said he sees more people retiring earlier than they had anticipated as their work prospects change.
That highlights the importance of planning ahead, so you anticipate whatever your retirement years bring. Admittedly, that can be tricky, given that Social Security could be susceptible to change.
If you’re 60 and up, there is less reason to worry any prospective changes would affect your benefits, Elsasser said.
But if you’re 45 to 60 years old, it’s reasonable to plan for benefit reductions of about 5%, he said. For those who are even younger, a 10% to 15% cut is possible.
Moreover, people of all ages should also plan for worst-case scenarios in which the program does reach a point where it can only pay a portion of benefits, which may prompt as much as a 24% benefit cut for retirees.
“The real importance of planning is just making sure you have all your bases covered,” Elsasser said.
Recommended Reading: Social Security Retirement Checks
Bridge To Medicare At Age 65
Remember that while you are eligible for reduced Social Security benefits at 62, you won’t be eligible for Medicare until age 65, so you will probably have to pay for private health insurance in the meantime. That can eat up a large chunk of your Social Security payments.
Read Viewpoints on Fidelity.com: Your bridge to Medicare
Theres A Social Security Spousal Benefit
Marriage brings couples an advantage when it comes to Social Security. One spouse can take what’s called a spousal benefit, worth up to 50% of the other spouse’s Social Security benefit. For example, if your monthly Social Security benefit is worth $2,000 but your spouse’s own benefit is only worth $500, your spouse can collect a spousal benefit worth $1,000 — bringing in $500 more in income per month.
Just as the benefit based on your own work history is reduced if you claim it early, the same is true for a spousal benefit. That 50% figure is the maximum amount that only a spouse who is at least full retirement age is eligible for. Taking the spousal benefit early at, say, age 62, reduces the amount to as little as 32.5% of the higher earners benefit. If you take your own benefit early and then later switch to a spousal benefit, your spousal benefit will still be reduced.
Also Check: How Is Social Security Paid Out
Youre Only Working Part Time
If you claim Social Security prior to your full retirement age while still holding down a part-time job, you might have your benefits reduced if your work income exceeds the annual limit. For 2021, if you are under full retirement age, your benefits go down by $1 for every $2 your income exceeds $18,960. If you reach full retirement age in 2021, your benefits go down by $1 for every $3 your income exceeds $50,520 prior to reaching full retirement age. If youre working part-time to help make ends meet, taking Social Security at 62 might make sense.
Children Can Also Collect Social Security Benefits
Minor children of Social Security beneficiaries can be eligible for benefits. Children up to age 18 and disabled children older than 18 may be able to receive up to half of a parent’s Social Security benefit. The disability must have occurred before the age of 22. The adult child can continue collecting the benefit even after the parent has died, as long as the disability prevents them from working.
Don’t Miss: Social Security Account Activation Code
Drawbacks To Applying For Ssdi And Retirement
This can backfire on some people, however. If you apply for early retirement but do not receive approval for your SSDI claim, you may be stuck drawing a smaller amount of retirement for the rest of your life. If this happened to you, we may be able to help you in appealing the SSDI denial. You have only 60 days to file this appeal after receiving a notice about the SSAs decision, however, so contact us as soon as possible after you receive a denial.
Costs Of The Solution
Two issues that are likely to arise in any discussion of fixing this problem are its cost to the Social Security trust fund and its cost to the federal budget. With regard to the cost to the Social Security trust fund, there are three ways to look at the issue.
One way is to view the cost relative to costs in a world in which no pandemic had occurred. For example, the cost could be measured using the economic assumptions in the most recent Social Security trustees report , which were formulated before the pandemic began. From this perspective, the cost would be zero because the legislative change would restore the world of Social Security benefits to what it would have looked like had there been no pandemic.
A second way of looking at the issue is to view the cost of the change relative to costs in a world that reflected economic assumptions indicative of the economic recession caused by the pandemic. From this viewpoint, there would be a cost associated with fixing the problem. For example, the chief actuary of the SSA estimates that if the AWI in 2020 were to fall 5.9 percent below its 2019 level, the AWI adjustments proposed by Chairman Larson would cost $90 billion in present-value dollars for the 75-year period from 2020 through 2094about 0.02 percent of taxable payroll over that period. . The cost over the 10-year period from 2020 to 2029 would be about $21 billion in nominal dollars.
Also Check: Find Out Your Social Security Benefits
Theres An Annual Social Security Cost
One of the best features of Social Security benefits is that the government adjusts the benefits each year based on inflation. This is called a cost-of-living adjustment, or COLA, and helps your payments keep up with increasing living expenses. The Social Security COLA is quite valuable its the equivalent of buying inflation protection on a private annuity, which can get expensive.
Because the COLA is calculated based on changes in a federal consumer price index, the size of the COLA depends largely on broad inflation levels determined by the government. In 2021, Social Security beneficiaries saw a 1.3% COLA in their monthly Social Security benefits.
The Kiplinger Letter predicted in September that the COLA for 2022 could be 6%, which would be the largest adjustment since 1982. The final COLA for 2022 will be announced on Oct. 13.
Heres what COLAs have been in other recent years:
- 2009: 5.8%
- 2021: 1.3%
You Have A Shorter Life Expectancy
The government incentivizes waiting to collect your Social Security benefits by giving you a larger monthly amount the longer you delay. For example, if you start collecting benefits at age 62 when your full retirement age is 66, your monthly benefit will be about 75% of your full-age benefit. So if you expected your monthly benefit to be $1,000 per month at 66, you would only receive around $750 at 62.
Although a larger monthly benefit might sound great, keep in mind that youd have to wait four years to get that extra $250 per month. You would receive $36,000 during those four years at the reduced amount of $750 per month.
When you start collecting $1,000 at age 66, that extra $250 per month wont let you break even for 12 years compared to collecting early. If your health is declining and you dont expect to live until youre 78, youll receive more in benefits during your lifetime if you start claiming as soon as possible.
Don’t Miss: Socials Security
Earliest Normal Social Security Eligibility Age: 62
Even though you can begin receiving benefits as early as 62, that doesn’t mean you should start taking them at that age. This is primarily because you will receive reduced benefits. If you want a larger amount of guaranteed income later in retirement, then waiting to begin benefits until you are a few years older will make sense. Remember, even if you are retired, you can wait until you’re 70 to apply for Social Security so that you get a higher benefit. It is one of the best ways to make sure you have a higher amount of inflation-adjusted income later in life.
Also, if you take Social Security at this early age and you have earnings above the Social Security earnings limit, your Social Security benefits will be reduced. Once you reach full retirement age , there is no reduction in benefits for continuing to work, no matter how much you make.
You can apply for Social Security retirement benefits any time after you reach 62. Once you reach 62, think of it like open enrollment you can begin at any time and do not have to wait until another age cut off.
Fact #: Social Security Is Particularly Important For People Of Color
Social Security is a particularly important source of income for groups with low earnings and less opportunity to save and earn pensions, including Black and Latino workers and their families, who face higher poverty rates both during their working lives and in old age. The poverty rate among Black and Latino seniors is over 2.5 times as high as for white seniors. There is a significant racial retirement wealth gap, leading seniors of color to face more retirement insecurity than white seniors. African American and Latino workers are less likely to be offered workplace retirement plans and likelier to work in low-wage jobs with little margin for savings. Social Security helps reduce the economic disparities between white seniors and seniors of color.
Recommended Reading: Social Security Based On How Many Years
If You Were Born In 1960 Your Full Retirement Age Is 67
You can start your Social Security retirement benefits as early as age 62, but the benefit amount you receive will be less than your full retirement benefit amount.
The chart below provides examples of the percentage of your full retirement benefit amount you and your spouse would receive from age 62 up to your full retirement age.
How To Use This Information
Each survivor’s situation is different. Talk to a Social Security representative before you decide to take benefits.
You cannot use the Retirement Estimator to determine benefit amounts for a surviving spouse. However, if you know what the worker’s yearly lifetime earnings were, you can use our Online Calculator to get a rough estimate of what the benefits would be for the surviving spouse at full retirement age.
If you know what the widow or widowers benefit is at full retirement age, you can use the information for the survivor’s year of birth to find out how much the widows or widowers benefit would be at various ages.
Recommended Reading: How Can I Find Out How Much My Social Security Benefits Will Be
What Is Full Retirement Age
The size of your monthly Social Security benefit depends on a few factors, including how much you earned over the years, the year you were born, and the age when you start claimingdown to the month.
Youll receive your full monthly benefit if you start claiming when you reach what Social Security considers your full retirement age , sometimes also referred to as normal retirement age. FRA was 65 when Social Security began, but it has been raised to 67 for anyone born in 1960 or later. To find your FRA, see the chart below.
|Finding Your Full Retirement Age|
There Are Social Security Survivor Benefits For Spouses And Children
If your spouse dies before you, you can take a Social Security survivor benefit. However, that won’t be in addition to your own benefit. You must choose one or the other. If you are at full retirement age, that benefit is worth 100% of what your spouse was receiving at the time of his or her death .
A widow or widower can start taking a survivor benefit at age 60. However, the payment will be reduced because it’s taken before full retirement age. If you remarry before age 60, you are not eligible for a survivor benefit. If you remarry after age 60, you may be eligible for a survivor benefit based on your former spouse’s earnings.
Eligible children who are under age 18 or were disabled before age 22 can also receive a Social Security survivor benefit. It would be worth up to 75% of the deceased’s benefit.
Don’t Miss: How Much Will You Get In Social Security
Using The Grids For Age 60
Below are the grid rules for people aged 60 and over. To see how the SSA would decide your case based on the grids, first find the table that discusses your RFC level. Next, find the row that describes your education level and previous work experience. The third column shows the decision the SSA will make based on those two factors.
Divorced Spouse’s Survivors Benefit
If the disabled worker was receiving or entitled to receive SSDI, a surviving divorced spouse is entitled to SSDI benefits if she is 6o years or older, 50 years or older and disabled, or caring for her deceased ex-husband’s minor or disabled child. For more information, see our article on survivor benefits.
Recommended Reading: What Will My Social Security Benefits Be At Age 65
Claiming Social Security Benefits At The Right Time Means More Money In Your Pocket Here’s A Guide To Everything From Knowing Your Full Retirement Age To Taking Social Security Spousal Benefits
For many Americans, Social Security benefits are the bedrock of retirement income so maximizing this stream of income is critical.
The rules for claiming Social Security benefits can be complex, but this guide will help you successfully navigate the details. Educating yourself can ensure that you claim the maximum amount to which you are entitled.
Here are 12 essential details you need to know.