Most understand that waiting to claim Social Security benefits can result in higher monthly payments. However, many don’t know that there are other ways to maximize their benefits, some of which depend on their marital status.
Understanding the strategies for maximizing your Social Security retirement income benefits should be prefaced with a review of the three basic forms of retirement benefits:
The Worker Benefit: This is the benefit you receive based on your own personal earnings history and for which you become eligible after 40 quarters of work.
The Spousal Benefit: This is the benefit paid to your spouse. For non-working spouses, this is 50% of the working spouse’s benefit. For working spouses, it is the greater of the benefit earned from his or her earnings or 50% of the worker’s benefit.
Divorce Spousal Benefit: This is the benefit paid to you based on if you are divorced with an ex-spouse. This aims to obtain the maximum possible financial benefits from the Social Security Administration for divorced individuals who were married for at least 10 years. This strategy involves carefully timing when to claim benefits and coordinating with the ex-spouse’s benefits.
The Survivor Benefit: This is the benefit paid to the surviving spouse, which is paid at a rate equal to the greater of his or her own current benefit or, depending on the widow or widower’s age, up to 100 % of the deceased spouse’s current benefit.1
The first and most obvious strategy for maximizing your Social Security benefit is to simply wait to reach age 70 before beginning to take benefits. By waiting until age 70 to receive benefits, your monthly payments may increase by 24%, not including any cost of living increases that may be added to this amount.2
– Cindy Mueller, Financial Planner
1. SSA.gov, 2023
2. SSA.gov, 2023
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