Are you a business owner with an at-home spouse who helps out with bookkeeping or a variety of other tasks that need to be done? Once you get to retirement age it’s too late, but for those of you that are 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 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 9 months or more, you can draw benefits up to your deceased spouse’s full amount, depending on what age 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 5 out of the last 10 years, which can help when the worst happens.
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 flat fee planning option that will help you review where you are today and give you insight about the impact on future income you can make by ensuring that both spouses are being paid for the work that they do.