Married couple planning needs to be handled carefully. Either spouse’s election relating to his or her own worker benefit can limit planning options. As a trusted financial advisor, you help couples navigate the issue of early or delayed election and can help them receive larger benefits. We are here to help you learn the intricacies of these situations to maximize the services you offer clients.
Spousal benefits are the most misunderstood Social Security benefits. Clients need well-versed advisors because you know:
- Both spouses must be at least age 62
- Married for at least 1 year
- The other spouse must have filed for benefits or “claim & suspend”
- Benefits based on other spouse’s earnings record
And that’s the easy part.
Many clients don’t realize that both spouses cannot receive spousal benefits at the same time on the other’s record.
When you add in these facts that you will learn as you further your Social Security training, you will be an asset they cannot afford to go without:
- Spousal benefits are based on 50% of full retirement benefits at full retirement age and are less if collected earlier. If a husband claims early, spousal benefits are calculated based on 50% of the husband’s primary insurance amount less the spouse’s reduction factor.
- Spouses are not penalized for other spouse claiming early
- Spousal benefits are determined when the spouse elects
- Assumes the spouse is not working
Prior to full retirement age, a client is “deemed” to be filing for all available benefits, and cannot choose one type of benefit (i.e. worker benefit) over the other (i.e. spousal benefit).
But they will always be paid the worker benefit first. They cannot subsequently claim their own worker benefits.
Those clients who are divorced often have an extra layer to work through. Ex-spouses have the same right as if still married if they were married at least 10 years, currently are unmarried and are age 62. Knowledgeable advisors understand that these recipients:
- Can collect survivor benefits
- If collecting survivor benefits and remarry, wait until at least 60. Can keep survivor benefits or
- Claim spousal on new husband if higher, one or the other but not both
- If divorced twice, and qualify, can claim off the highest
Contact us today to continue your education of the Social Security system or to partner with us to bring these services to your clients.