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Do you qualify for an increase in your Social Security benefits? This is the criteria you

In 2024, a substantial number of Americans, approximately 68 million, are expected to receive Social Security checks, and in this day and age, these are essential, often bridging the gap between financial stability and insecurity. According to a 2023 Gallup poll, nearly 90% of retirees currently depend on Social Security to some extent, with about 60% of them considering it a major source of income.

Retirement benefits may be the most common form of Social Security, but there are many other ways to receive benefits from the state, like spousal benefits, one of the other most used benefits. As they are not as well-known, there are many things you may not be aware of when it comes to spousal benefits, including eligibility criteria and potential amounts you could receive. So, what should you know about them?

  1. Your own Social Security benefits could affect your eligibility

To qualify for spousal benefits, the main requirement is being married to someone who is eligible to receive retirement or disability benefits. This means that even if you have not worked or haven’t worked enough to qualify for retirement benefits based on your own work history, you can still receive Social Security benefits as a spouse.

However, if you are eligible for retirement benefits based on your own work history, it might affect the amount you receive or your eligibility for spousal benefits altogether. The maximum spousal benefit you can receive is 50% of your spouse’s full benefit amount at their full retirement age (FRA). If your own retirement benefit at your FRA exceeds this amount, you will not qualify for spousal benefits and if it is lower, you will receive the higher of the two amounts.

To receive the full spousal benefit, you must wait until your own FRA to file. Just like with regular Social Security benefits claiming early, as early as age 62, results in a permanently reduced amount. To receive the benefits, your spouse must also be collecting benefits before you or at the same time as you, but in case of spousal benefits waiting past full retirement age will not increase your payout.

  1. Continuing to work in retirement could reduce your benefits

For those aged 62 and older who have not yet reached their FRA, continuing to work while claiming benefits can reduce the monthly amount you receive. Just like with Social Security benefits, this reduction is due to the retirement earnings test, which imposes an income limit to determine how much of your benefits will be withheld due to earnings from a job. This limit changes annually and differs based on whether or not you will reach your FRA within the year.

For example, if you are 65 years old with an FRA of 67 and earn $25,000 per year from a job, you will be subject to the annual limit of $22,320. Since your income exceeds this limit by $2,680, your benefits will be reduced by $1,340 annually, equating to approximately $112 per month.

Whilst, as we have said, this retirement earnings test also applies to standard retirement benefits, since spousal benefits are generally lower, the impact of these reductions can be more significant. The positive aspect is that once you reach your FRA, the Social Security Administration will recalculate your benefits to account for the amount previously withheld due to your earnings and if you continue to work you will not be penalized.

  1. Divorce benefits are also an option for some retirees

Even if you are not currently married, that does not mean you are not eligible for spousal benefit. In certain cases, divorced individuals can also qualify for these benefits, but certain conditions must be met:

– You must not be currently married. If your ex-spouse has remarried, it does not affect your eligibility for divorce benefits.

– You and your former spouse must have been married for at least 10 years.

– You must be at least 62 years old, unless you are caring for a child who is under 16 or disabled.

– You must wait to file until your ex-spouse begins claiming benefits unless you have been divorced for at least two consecutive years.

Same as spousal benefits, the maximum payment you can receive is 50% of your former spouse’s full benefit amount, which you will get if you file at your FRA and if you are entitled to retirement benefits that exceed the maximum divorce benefit, you will not qualify for this type of payment.

Importantly, claiming divorce benefits or spousal benefits does not impact your spouse’s or ex-spouse’s benefits. Even if your ex-spouse has remarried, their current partner can still claim spousal benefits while you receive divorce benefits.

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