Spouses Who Dont Qualify For Their Own Social Security
Spouses who didnt work at a paid job or didnt earn enough credits to qualify for Social Security on their own are eligible to receive benefits starting at age 62 based on their spouses record. As with claiming benefits on your own record, your spousal benefit will be reduced if you take it before reaching your FRA. The highest spousal benefit that you can receive is half of the benefit that your spouse is entitled to at their FRA.
While spouses get a lower benefit if they claim before reaching their own FRA, they will not get a larger spousal benefit by waiting to claim after their FRAsay, at age 70. However, a nonworking or lower-earning spouse may get a larger spousal benefit if the working spouse has some late-career, high-earning years that boost their benefits.
Who Receives Social Security Benefits
Retired workers account for 71 percent of the programs beneficiaries. Disabled workers make up another 13 percent of beneficiaries. The remainder are the survivors of deceased workers as well as spouses and children of retired and disabled workers.
Social Security is a major source of post-retirement income for low-income seniors. For seniors at the bottom of the income distribution, benefits make up over 80 percent of their total yearly income. However, the benefits received by low-income retirees are modest. Workers who earned an average of $26,600 per year before retirement would receive only $14,200 per year in Social Security benefits if they retired in 2021 at the full retirement age.
What Is My Full Retirement Age
Full retirement age for future beneficiaries will fall between the ages of 66 and 67. This is the age at which you can expect a full, unreduced benefit from Social Security. If you delay filing for benefits until after your full retirement age, you can expect a benefits increase of up to 8% per year until you reach age 70.
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When You’re Eligible For Medicare
Older people who are U.S. citizens or permanent legal residents can qualify for traditional Medicare coverage as early as age 65.
You might also be eligible for Medicare if you are under age 65 and meet one of the following conditions:
- You are on dialysis or you’ve had a kidney transplant because of end-stage renal disease
- You have been entitled to Social Security or Railroad Retirement Board disability benefits for 24 months
- You have Lou Gehrig’s disease.
You are automatically enrolled in Medicare Part A if you qualify for Medicare and you’ve received Social Security or Railroad Retirement Board benefits for at least four months before you turn 65. You can then choose to enroll in other parts of the program or to delay enrollment.
If you are over 65 and do not meet any of the above criteria, you still may be eligible to purchase coverage through Medicare Part A. If you are unsure whether you are eligible, you can check using the Medicare Eligibility & Premium Calculator.
The work credit requirement is an algorithm used to determine how long a worker paid into the system.
Working After Full Retirement Age Faq
Retirees may work while collecting Social Security benefits, but those younger than their FRA will be subject to the retirement earnings test .
Under this test, if your earnings exceed a certain limit , you will temporarily forfeit some or all of your benefits. Once you reach full retirement age, your benefit is recalculated and you may receive most of that money back.
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It’s All About Work Credits
When you make money and pay Social Security taxes on it, you earn work credits. The amount of earnings you’ll need to earn a work credit changes from year to year. In 2020, for example, you get one work credit per $1,410 of earnings. In 2021, you’ll need to earn $1,470 to get one work credit.
The maximum amount of work credits you can earn per year is four, regardless of how high your income is. Meanwhile, you need a total of 40 work credits in your lifetime to qualify for Social Security benefits based on your personal earnings history. You can accumulate those credits a number of ways, though. For example, you could work for 10 years and earn four credits per year for a total of 40, or you could work very part-time for 20 years and earn two credits per year, also totaling 40.
Keep in mind that as long as you pay Social Security taxes on your income, it can count toward work credits. In other words, if you do freelance work but pay taxes on that income, it counts the same way a salary would.
How Your Social Security Benefits Are Calculated
Your Social Security benefits are based on the 35 calendar years in which your income was the highest. If you have fewer than 35 years of earnings, each year with no earnings will be entered as zero. You can increase your Social Security benefit at any time by replacing a zero or low-income year with a higher-income year.
There is a maximum Social Security benefit amount you can receive, though it depends on the age you retire. For someone at full retirement age in 2021, the maximum monthly benefit is $3,113. For someone filing at age 70, the maximum monthly amount is $3,895.
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The Social Security Retirement Age Increases In 2022
While you can start Social Security payments at age 62, your monthly checks are reduced if you begin collecting benefits at this age. To claim your full benefit, you need to at your full retirement age, which varies by birth year.
Here’s a look at how the Social Security retirement age is changing, and what this means for your retirement payments:
— An older Social Security full retirement age.
— A bigger reduction if you claim Social Security early.
— Less of a benefit for delaying claiming Social Security.
— The Medicare eligibility age remains the same.
— You need to carefully determine the optimal age to start Social Security.
An Older Social Security Full Retirement Age
The full retirement age used to be 65 for those born in 1937 or earlier. Those born between 1943 and 1954 have a full retirement age of 66. The full retirement age further increases in two-month increments each year to 66 and 10 months for those born in 1959, up from 66 and eight months for those with a birth year of 1958.
The full retirement age for those who turn age 62 in 2022, born in 1960, is 67. The full retirement age will remain age 67 for everyone born in 1960 or later.
A Bigger Reduction If You Claim Social Security Early
Workers who are eligible for Social Security can start payments at age 62, regardless of their full retirement age. However, the benefit reduction for early claiming is bigger for those who have an older retirement age.
The Medicare Eligibility Age Remains the Same
If You Are Still Working And Receiving Old Age Security Payments
If you are still working and your income is higher than $79,054 , you will have to repay part of your Old Age Security pension payment. Delaying your first payment can let you keep more of your pension.
If you are planning on receiving the Guaranteed Income Supplement and your income is less than what you reported on your tax form last year, contact us.
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Can Early Retirement Affect My Social Security Benefits
Workers can start receiving full retirement age benefits at 66 years old if they were born between 1943 and 1954. For those born in 1955 and beyond, the full retirement age is 67. When a worker decides to receive their benefits earlier than the full retirement age, the total amount received is reduced. According to the United States Social Security Administration, a worker born in 1957 will receive a 27.5% reduction in total retirement income from Social Security when choosing to receive early retirement age benefits. Choosing to take early retirement will also affect the amount that a spouse will receive. In the same example, a workers spouse would also receive a 32.5% reduction in benefits. The actual percentage of early retirement age reduction will depend on several factors including the workers birth year and the date of the early retirement.
How To Calculate Social Security Benefits
Lets say your FRA is 66. If you start claiming benefits at age 66 and your full monthly benefit is $2,000, then youll get $2,000 per month. If you start claiming benefits at age 62, which is 48 months early, then your benefit will be reduced to 75% of your full monthly benefitalso called your primary insurance amount. In other words, youll get 25% less per month, and your check will be $1,500.
That reduced benefit wont increase once you reach age 66. Rather, youll continue to receive it for the rest of your life. It may go up over time due to cost-of-living adjustments , but only slightly. You can do the math for your own situation using the Social Security Administration Early or Late Retirement Calculator, one of a number of benefit calculators provided by the SSA that can also help you determine your FRA, the SSAs estimate of your life expectancy for benefit calculations, rough estimates of your retirement benefits, individualized projections of your benefits based on your personal work record, and more.
Although the cost-of-living adjustments announced each year are usually only slight increases, Social Security benefits will increase by 5.9% in 2022, marking the largest increase since 1982.
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Here’s What You Need To Know About Social Security Eligibility
Social Security isn’t something you’re entitled to just because. You need to earn your benefits by paying taxes on wages throughout your career. What if you only work for a handful of years, or spend most of your life as a part-time worker? Here’s what you need to know about Social Security eligibility.
Social Insurance And The Distributional Effects Of Social Security
The social security system provides a form of social insurance against the risk of extreme poverty in old age by redistributing income form higher earners to lower earners.
The lifetime benefit/tax ratio is one way to assess the degree of redistribution among people with different levels of career-average incomes and from different birth cohorts. If the ratio is less than one, people are expected to receive lifetime benefits that are less than their lifetime taxes if it is greater than one, lifetime benefits are expected to exceed lifetime taxes.
For people in the 1960s birth cohort with income in the middle quintile, the benefit/tax ratio is projected to be 1.25, based on calculations using data from the Congressional Budget Office. For them, the expected value of lifetime benefits roughly matches their expected contributions. This measure accounts not only for their projected path of earnings, but also the expected length of their life.
At the same time, those in the highest income quintile in the 1960s birth cohort are projected to have a benefit/tax ratio of only 0.82, which means that their lifetime benefits are expected to be only about 80 percent of the taxes that they paid.
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Increasing The Eligibility Age For Social Security Pensions
Social Security faces a long-term financing problem. Many young workers believe the problem is so severe they may never receive a Social Security check. The most logical solution to Social Securitys financing problem is to trim promised benefits and increase payroll taxes moderately. A sensible way to reduce future benefits is to increase the early eligibility age and normal retirement age for retirement pensions. This reform is justified by the substantial increase in life spans that has occurred since Social Security was established in the 1930s. An increase in life spans, when the normal retirement age remains unchanged, is equivalent to a sizable increase in lifetime Social Security benefits.
Increasing the retirement age is unpopular with voters. Unfortunately, so are all other reforms that would restore Social Security to solvency, including tax hikes and cuts in the formula for calculating full pensions.
Doing A Breakeven Analysis And Other Ways To Decide How Soon To Start
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A Tea Reader: Living Life One Cup at a Time
If youre about to retire, you may be wondering whether you should start claiming your hard-earned Social Security benefits now. Here are a few key factors to consider in making that decision.
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Is My Spouse Eligible To Receive Social Security Spousal Benefits
Spouses are eligible to receive 50 percent of their spouses full retirement benefit if they wait until they reach full retirement age. If they apply for a spousal retirement benefit before that time, the amount is pro-rated, depending on the age at which the spouse applies. For example:
If a spouse applies for a spousal retirement benefit at age 62 and the full retirement benefit is age 67, the applicant will get 32.5 percent of the spousal benefit.
If a spouse applies for a spousal retirement benefit at age 62 and the full retirement benefit is age 65, the applicant will get 37.5 percent of the spousal benefit.
The benefit increases as ages go up, to a maximum of 50 percent at full retirement age. It should also be noted that only one spouse can apply for a spouses benefit when a couple is married.
In cases of divorce, the divorced spouse can get retirement benefits on the spouses record if the marriage lasted for at least 10 years. To collect this benefit, the spouse must be at least 62 years old and not married. That benefit does not impact the amount a spouse and their current married partner can get.
At What Age Does Social Security Disability Stop
Depending on when you were born, your retirement age will be between 65 and 67. Your retirement age is the age when Social Security Disability stops. Once these disability benefits stop, they then get converted into Social Security retirement income.
Generally speaking, the Social Security Administration does not provide disability income and retirement income to the same person at the same time. This applies if your benefits do not stop for other reasons, such as earning a certain amount of income or recovering from your disability.
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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%
Get A Social Security Number
To qualify for Social Security as a legal immigrant, you must have a Social Security number . Many people apply for one during the immigration process or are able to visit a Social Security office in person to complete this process. This will require filling out Social Security Form SS-5.
Legal immigrants also need a Social Security number to be hired by any law-abiding employer in the United States. The employer will then report your wage earnings to the federal government under your name and your SSN. That way, the Social Security Administration can connect work credits to individuals and make sure you receive the work credits and benefits you have earned.
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You Can Claim If You Earn Enough Work Credits Even From Other Nations
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Eric is currently a duly licensed Independent Insurance Broker licensed in Life, Health, Property, and Casualty insurance. He has worked more than 13 years in both public and private accounting jobs and more than four years licensed as an insurance producer. His background in tax accounting has served as a solid base supporting his current book of business.
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Legal immigrants who meet the Social Security Administration requirements for work creditsor who earned the equivalent of Social Security credits through their work history in their previous countrycan receive benefits in the U.S. Social Security benefits include payments to qualified retirees or those with disabilities and survivor benefits for the spouse and children of a deceased worker. This article explains how immigrants to the United States can qualify for Social Security benefits.
Can You Still Work While Receiving Social Security
You can continue to work while you receive Social Security benefits. But there is a limit to how much you can earn and still receive full benefits. The earning limit may be adjusted each year.
If you earn above the limit, Social Security will deduct a certain amount of your benefits each year.
Social Security Benefits, Earning Limits and Penalties
|SSA deducts $1 from your benefits for every $3 you earn above the limit|
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