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Claiming Social Security Benefits

  Sanjiv Gupta CPA  Published 
Claiming Social Security Benefits

Workers have a lot of ambiguity while claiming social security benefits as there are too many clauses and conditions to fulfill. Some basic questions are answered in this section, which gives more clarity for the worker about his retirement benefits. It is their hard-earned money, and it is only natural for the workers to have their inhibitions while claiming the benefits for social security.

One of the rules explains that if the wife applies for benefits from social security when she turns 66 years, she would be eligible for half of her husband’s benefits as part of spousal benefits. The spousal benefit that a wife would get is the sum of her retirement and an incremental amount that is received as part of a husband’s half benefits.

Secondly, the Social security scheme works on the assumption that the husband keeps working until the full retirement age to get the full benefits. If the husband opts for early retirement, the final benefit that comes from social security is lesser than expected. The wife can get spousal benefits at the age of 62 years only if the husband is getting the benefits at the same time. However, the additional clause is that, if the wife has not reached the full retirement age, then she is eligible only for half of the spousal benefits. Delaying the social security claims gives an increase in the final benefits. One can expect increased benefits surely regardless of the market conditions. It gives high returns coupled with low risk on their investment.

If the husband is actively collecting a retirement benefit, then the wife becomes eligible for her spousal benefit, by default provided it is higher than her retirement benefit. When the husband completes the full retirement age of 66, the wife starts to receive half of her husband’s benefits as a spousal benefit. If the wife wanted to get spousal benefits before that, then the husband should have started to receive his retirement benefits.

The husband also has the option to file and suspend all his benefits once he reaches his full retirement age. In this method, though the wife would still continue to get the spousal benefits at half of the husband’s FRA benefits, the retirement credit could get slightly delayed. This is an option that needs to be considered if either the husband or the wife expects some longevity and also have other sources of money until they reach 70 years. In this option, the retirement benefits rise to 32% in just four years and the widow’s benefits that the wife gets are equal to the husband’s retirement benefits. Benefits paid to the wife does not impact the retirement benefits of the husband in any way.

The above explanation was given by Mr. Gupta. These can be used only for knowledge purposes but should not be treated as personal advice. Every company would have an adviser exclusively to look after the retirement needs of the employee. It is advisable to consult this adviser for the best results.