Are you a business owner with an at-home spouse who helps out with bookkeeping or other tasks that need to be done? Once you get to retirement age it’s too late, but for those of you in your 20’s, 30’s, 40’s or even 50’s there’s still time to let these efforts build future benefits. Paying your spouse at least $4,880 a year will ensure that they continue to vest into the Social Security system, which will help you at retirement time.
To fully vest you need to earn at least 40 credit hours, with a maximum of 4 credits per year at $1220 per credit. Spouses who are not vested can still pull a half benefit off of their working spouse’s retirement benefit (or ex-spouse’s, if married over 10 years). If widowed after being married a year or more you can draw benefits up to your deceased spouse’s full amount, depending on the age when you decide to file.
If both spouses have work history, the Social Security retirement benefits picture can drastically change for the better. With two vested partners you’ll also have more options, such as the potential for the lower-earning spouse to pull earlier while delaying the higher earning spouse’s filing until age 70 to get the highest benefit. And don’t forget that Social Security disability benefits are hinged on a person working at least five out of the last 10 years, which can help should the worst happen.
As you can see, it’s in your best interest to ensure that the work both partners contribute to your business is recognized as paid employment by the Social Security Administration. We offer a pre-check Social Security planning option that will help you review where you are today and give insight about the impact on future income you can make by ensuring that both spouses are being paid for the work that they do.
Please contact our office to learn more or sign up today to start planning for your retirement.
Filing for Social Security involves a dizzying array of choices and decisions. When should you claim benefits? What’s the best way to maximize your income? Selecting the right options isn’t easy for anyone, and for those who are divorced it can be even harder. If you’re confused by the myriad of rules and regulations around filing for Social Security as a divorced individual, keep these guidelines in mind:
If you were married over 10 years, you can claim spousal benefits. This is true as long as you meet the following conditions:
You’ve been divorced for at least two years at the time you file.
You have not remarried.
You have reached the age of 62 (or older).
Your spouse is qualified by work history and citizenship to claim Social Security retirement/disability benefits.
Your spousal benefit will be equal to one half of the full retirement amount your ex-spouse is qualified to receive, assuming you file at your full retirement age. In many cases, this could be more than the amount you would receive based on your own work history – if you were out of the work force caring for children, for example. If your own work record is higher than you will receive your own benefit. In either case if you file at age 62 this could reduce your benefit as much as 30% for the rest of your retirement which can cost you thousands of retirement dollars.
You can receive the full amount of your ex-spouse’s Social Security benefit if he or she passes away. If your ex-spouse is deceased you can receive benefits as a widow or widower instead of spousal benefits. You qualify for the full amount of your ex-spouse’s retirement benefit, just as you would if you had still been married at the time of death. The rules are similar to those for spousal benefits:
The marriage must have lasted at least 10 years.
You must have attained your full retirement age (your benefit will be less if you file early).
You must not have remarried before age 60. A marriage at or after the age of 60 will not affect your ability to qualify for this type of benefit.
In both types of Social Security benefits, it makes no difference whether your spouse has remarried one or more times. These benefits are yours if you qualify based on your age and marital status, even if there is a current spouse or widow who also collects benefits.
Still confused? Please contact our office for a consultation. We’ll help you clarify your options and find your best path forward.