Women’s Series: Understanding Social Security
While doing some research on women and finances I found out that some of the top concerns among close-to-retired women is Social Security, Medicare and Health Insurance. I’ll be writing about Medicare & Health benefits in next month’s newsletter and focusing on social security this month. For some women social security is a big mystery. Many women do not know whether or not they’ll be eligible for it, when they are eligible and how much they will receive. These tips may help reduce the mystery.
Basic Social Security Information:
- The social security benefit is calculated on the best 35 years of earnings
- Full retirement age (the age you are eligible to receive your maximum benefit):
- Year of birth 1943-1954 full retirement age is 66
- Years of birth between 1955-1959 is during your 66th year
- Years of birth from 1960 and after full retirement age is 67
- Minimum age to start receiving benefits is age 62
- If your full retirement age is 66 then you will be penalized 25% of your full retirement benefits and if your full retirement age is 67 then your benefits are penalized by 30% of what your social security would be at full retirement age
- If you delay receiving your benefits you will receive an increased amount of social security based on how long wait. The maximum amount of time you can wait over your full retirement age is until age 70.
- In 2015 if you make more than $15,720 in annual earnings and are under the full retirement age and receiving social security benefits your benefit will be reduced by $1 for every $2 earned in excess of the limit.
- Once you reach full retirement age there is no earnings limit.
Benefits for Spouses & Ex-Spouses:
- Spouses of a living retired worker is eligible for up to one-half of the living retired worker as long as the retired worker’s full retirement amount as long as the retired worker is at full retirement age and has applied for social security
- If the retired worker applies he/she can voluntarily suspend their checks so that their spouse can start receiving their social security checks.
- The spouse of the worker has to be at least 62 to receive up to one-half of their working spouse’s social security benefit depending on their age and what they are entitled to receive on their own record from Social Security.
- Divorced spouses are eligible to receive benefits based on their working ex-spouse if:
- The marriage lasted for 10 years or longer
- The ex-spouse of the worker is at least 62 years of age
- The worker is drawing disability or social security retirement, however if the divorce occurred more than two years ago the worker does not have to be drawing social security
- The ex-spouse is subject to earnings limits until the age of full retirement
- The ex-spousal benefits are one-half of the worker’s benefit but is reduced if the ex-spouse takes benefits before full retirement age and the ex-spouse will only receive the higher of their own benefit from social security or their ex-spouse’s.
Benefits for Widows:
- A surviving spouse is eligible for benefits of their deceased spouse if the marriage was longer than 9 months and is not remarried or the surviving spouse remarried after her age of 60.
- A surviving spouse can start benefits at age 60, but it’s only 71.5% of the deceased spouse’s benefit amount the deceased was receiving or entitled to receive at the time of their passing.
- If the surviving spouse waits until their full retirement age then they will receive 100% of the deceased spouse’s benefits amount at the time they passed or the amount they would have been entitled to.
The social security website has a great site for women in particular; please check it out – it’s very helpful: https://www.socialsecurity.gov/people/women/
If you are interested in learning more about social security and the strategies that can be used to fully take advantage of your social security benefits please give me a call and we’ll discuss your particular situation.
Our next newsletter will be on Medicare and Health Care Benefits.
CERITIFED FINANCIAL PLANNER™
The material has been prepared or is distributed solely for information purposes only. Statistical information has been obtained from sources believed to be reliable, but its accuracy and completeness are not guaranteed.
Raymond James and its advisors do not offer tax advice. You should discuss any tax matters with the appropriate professional. Any opinions are those of Christina Jones and not necessarily those of Raymond James.