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Maximum Social Security Retirement Benefit 2016
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June 22, 2024 1:27 pm
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8 min read
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Maximum Social Security Retirement Benefit 2016 – If you are eligible for Social Security spousal benefits, the amount you receive will depend on a variety of factors, including your age, the amount of your spousal benefit, and whether you have other retirement benefits.
What’s right for you? Anyone whose spouse, ex-spouse, or deceased spouse received or was eligible to receive benefits when you reached eligible age can also receive benefits.
Maximum Social Security Retirement Benefit 2016
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The maximum spousal benefit you can receive is 50% of your spouse’s full retirement benefit. The exact amount and timing you receive will depend on several factors, including your spouse’s age and past earnings, and your age and past earnings.
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This gives you room to maximize the amount you receive. And if that amount is less than what you would have received based on your previous income, you will automatically receive the higher amount.
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Below, learn how to find out if you qualify for Social Security spousal benefits and how much you can get. And you’ll learn about the fate of Social Security’s once-popular spousal benefit loophole. (Hint: It’s not good news.) Still, you can maximize your Social Security spousal benefit if you know the rules highlighted in this article.
If your spouse applies for Social Security benefits, he or she may receive benefits based on his or her length of service if:
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When you apply for spousal benefits, you will also apply for benefits based on your work experience. If you qualify for benefits based on your income and the benefit amount is more than your spouse’s benefit, you will receive it. According to the Social Security Administration (SSA), if you receive less than this, you will receive “a combination of both benefits equal to the higher amount.”
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Spousal benefits are based on what the other spouse would receive if he or she began receiving Social Security benefits at full retirement age. It gradually increases from age 66 to age 67. Previous for those born in 1942 – 65 years old. Born from 1943 to 1959 – 66 years old. For those born in 1960 and later, the age is 67.
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Regardless of when the spouse actually retired or when the spouse died, the total amount of that person’s benefits are important when calculating spousal benefit eligibility.
SSA has an online calculator that shows the impact of early retirement. Early retirement is the percentage of spousal benefits you will receive based on your age when you file.
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The simple answer to the calculation is: As long as you wait until your full retirement age, you are entitled to half of your spousal benefit. The earlier you submit, the less money you receive.
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The amount you receive depends on when you start claiming benefits. You can claim spousal benefits as early as age 62, but you won’t receive as much benefits as you would if you waited until your full retirement age. For example, if your full retirement age is 67 and you choose to claim your spousal benefit at age 62, you will receive a benefit equal to 34.6% of your total spousal benefit.
The amount you are late increases every year. Once you reach full retirement age (age 67 in this example), you may receive up to 50% of your spouse’s total benefit. Therefore, there is no incentive to file for spousal benefits after full retirement age.
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The calculations become a bit more complicated if you are entitled to benefits from a foreign employer that are not covered by state pensions or social insurance. In this case, you may still qualify, but the amount will be reduced.
For example, if you have a state pension with no Social Security taxes withheld, your spousal benefit will be reduced by two-thirds of your pension. This is called government pension compensation.
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For example, let’s say you are eligible for $800 in Social Security spousal benefits and you receive a $300 monthly pension from a government employer that does not withhold Social Security taxes. Your Social Security contribution will be reduced by two-thirds of $300, or $200, so your total benefit from all sources will be $900 per month ($800 – $200] + $300).
Even if your ex-spouse has not yet retired, you may be eligible for spousal benefits as long as you have been separated for at least two years.
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If you are divorced, you may be eligible to receive spousal benefits based on your former spouse’s length of service. The rules are pretty much the same except:
Even if your ex-spouse has not yet applied for unemployment benefits, you can apply for spousal benefits as long as you have been separated for more than two years. However, you must be at least 62 years old and your spouse must be old enough to receive benefits.
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If the survivor has reached full retirement age at the time of application, the widow may receive up to 100% of the spousal benefit.
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If the widower is over 60 but younger than full retirement age, the payment is reduced from 71½% to 99% of the deceased’s pension. Therefore, if you want to maximize the amount you receive, it may be a good idea to delay until you reach full retirement age.
You can also receive benefits if your spouse dies before retirement age. Here’s how it works: Every employee or self-employed person receives Social Security credits for their work. In 2024, one credit is equivalent to $1,730 in profit. If you earn $6,920 (4 credits), you have used up all your credits for the year. If your deceased spouse earned 40 credits (the amount for 10 years of work) and earned at least $6,920 per year, you received spousal benefits.
Additionally, if you are receiving spousal benefits and your spouse dies, you must notify SSA. This converts the spousal benefit (up to 50% of the partner’s full retirement age benefit) into a survivor benefit (up to 100%). And do it immediately. This generally does not apply retroactively.
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You may hear or read about other ways to increase your spousal benefits. Unfortunately, the popular strategy has been abandoned under new Social Security rules.
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Until 2016, workers could maximize their delayed filing deductions by filing for benefits and then stopping their own benefits (allowing their partner to claim spousal benefits). This so-called file-and-defer strategy meant that the lower-income partner could collect spousal benefits while the primary earner could increase the benefit amount by accumulating delayed reti
rement credits.
You can apply for unemployment benefits and suspend payments, but other benefits typically available on your account (such as spousal benefits) will no longer be paid during the suspension period.
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Each couple must figure out the best way to maximize benefits based on their own circumstances.
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The following three strategies will help you maximize your Social Security spousal benefit, depending on your situation. But regardless of your situation, remember that the most your spouse can receive is 50% of what your higher-earning partner can receive at full retirement age.
If one partner has little or no employment, the best strategy is to delay receiving Social Security benefits until age 70 to receive the maximum amount possible. The full retirement age for most baby boomers is 66, or 67 for those born in the 1960s. However, by delaying claiming until age 70, earners will accrue delayed retirement credits, which increase monthly benefits by a certain percentage each year. For those born in 1943 or later, the rate is 8% per annum.
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This does not affect the amount of your spousal benefit. If you delay claiming your personal pension benefits until you reach full retirement age, your benefits will increase over time. However, this will not affect your spouse’s benefits because they are maximized at retirement age. This means that if your spouse delays filing for spousal benefits after your full retirement age, he or she will not receive any benefits.
On the other hand, if both spouses work and have roughly the same income, their individual Social Security benefits will be higher than their spousal benefits. So the best strategy for both is to delay claiming benefits until age 70.
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If you have been separated for more than two years, you can apply for spousal benefits if your marriage has lasted more than 10 years. Or, if you’re still married, considering divorce, and are approaching retirement age, try filing for spousal benefits before your divorce becomes final. If you have been married and divorced multiple times, you may elect to receive maximum spousal benefits.
Widows and widowers can receive full survivor benefits when they reach full retirement age, but benefits may be reduced after age 60. And if you remarry, you can apply for spousal benefits based on your new spouse’s record.
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