Social Security For Dummies. Jonathan Peterson

But however fatalistic your view, the reality is that a 60-year-old man has a greater chance of dying in his sleep at 85 from various ailments than coming to an accidental finale much earlier. Why not make sure that you have the finances you need in the meantime?

       “I’d better get my share before Social Security goes bust and there’s nothing left.” This belief strikes a chord with some people. After all, you’ve been hearing doom and gloom about Social Security for years. But as a strategy for collecting your benefits, it’s a bad idea. Most proposed reforms would not hit retirees or near retirees. When Congress voted in 1983 to raise the full retirement age, for example, the impact came far in the future, affecting people who reached full retirement age in 2000 and beyond.

Things turned out differently than either Eager Edgar or Steady Betty planned. The point is that you can’t be sure how long you’ll live. When you’re deciding when to begin collecting Social Security, keep different possibilities in mind and consider the implications for your standard of living and sense of well-being.

Considering Your Spouse When You Claim Social Security

      Earlier in this chapter, I focus on how timing your collection of Social Security affects your own bottom line. But the issue of timing is even bigger than that. You and your spouse could face decisions on when to collect benefits that could affect your household for many years. I’m talking about benefits that go to a dependent spouse, based on a breadwinner’s work record, and benefits that go to a survivor after the breadwinner dies. Women are more vulnerable than men to poverty in old age, so these decisions may be of great consequence to many wives, but the same principle applies to everyone: Choices on when to begin Social Security benefits could have a lasting impact on you and your spouse’s financial well-being.

      If you’re eligible for Social Security as a dependent spouse, you face a real choice about when to begin benefits. You may claim this benefit if you have reached 62 and your partner has begun collecting retirement benefits. But your own spousal benefit is reduced for each month you claim it before you’ve reached your own full retirement age. At your own full retirement age, your spousal benefit can be 50 percent of the breadwinner’s full retirement benefit. But if you don’t wait, and you claim it as early as 62, it’s reduced significantly.

      By the way, if you’ve established your own earnings record with Social Security, that could change things. In that case, your payment is the greater of the benefit you’ve earned yourself or the amount you qualify for as a dependent spouse.

      For workers with a full retirement age of 67, claiming the spousal benefit early reduces benefits by as much as 17.5 percent for those claiming at 62 to a little over 4 percent for those claiming at 66. Suppose your spouse has begun collecting his or her full retirement benefit of $1,000 per month. If you wait until you reach your full retirement age of 67, you get $500 per month in spousal benefits. If you start as soon as possible, at 62, you get about $325. You can get more details on what the spousal benefit means to you, and how your amount is affected by when you claim it, at www.ssa.gov/oact/quickcalc/spouse.html.

Social Security applies a monthly reduction rate to spousal benefits taken before full retirement age. The rate is

of 1 percent per month for each of the first 36 months before full retirement age, and

of 1 percent for each month before then.

      

If a dependent spouse starts collecting before reaching his or her full retirement age, the amount is reduced. But unlike some benefits, it doesn’t work the opposite way: Social Security provides no “bonus” for waiting past full retirement age. The upper limit of a dependent spouse benefit is 50 percent of the benefit that would go to the breadwinner at full retirement age. (The breadwinner can’t push the spousal amount higher by delaying collection of benefits past his or her own full retirement age.) Note: A spouse who has reached full retirement age will get 50 percent of the breadwinner’s full retirement benefit, even if the breadwinner begins collecting before full retirement age.

Table 3-3 shows the monthly reductions that affect spousal benefits taken by a dependent spouse before reaching full retirement age. It also shows that the monthly reductions differ, based on year of birth.

      Your decision about when to collect benefits also has a major effect on the amount of Social Security you leave behind for a surviving widow or widower. If you die, your spouse (at his or her full retirement age) can get 100 percent of your benefit. That means the bigger a benefit you wait to receive, the more you leave your surviving spouse. You could look at it this way: A retirement benefit you claim at 70 is 76 percent more than what you get if you start at 62. That much larger benefit is what you could leave a surviving spouse, who may rely on it for a long time.

      Widows and widowers also face timing decisions. They can collect their survivor benefit as early as 60, but with a substantial reduction. (I’m speaking here about aged widows and widowers who are not disabled or raising children — factors that allow for earlier eligibility.) Generally, it will cost the surviving spouse about 30 percent of the benefit to take it at 60, when compared to waiting until full retirement age.

      

Social Security offers a lot of material online about survivors’ benefits and other categories of benefits. To find out more about survivors’ benefits, go to www.ssa.gov/pubs/10084.html.

TABLE 3-3 Primary and Spousal Benefits at Age 62^*

			Primary	Spouse
Year of Birth	Normal or Full Retirement Age	Number of Reduction Months	Amount	Reduction	Amount	Reduction
1937 or earlier	65 years	36	$800	20%	$375	25%
1938	65 years and 2 months	38	$791	20.83%	$370	25.83%
1939	65 years and 4 months	40	$783	21.67%	$366	26.67%
1940	65 years and 6 months	42	$775	22.5% Скачать книгу В начало < 16 17 18 19 20 21 22 23 > В конец