Four Common Social Security Spousal Benefits Mistakes

Even if you haven’t worked a day in your life, if you’re married to an eligible recipient, you may be entitled to a sizable Social Security payment. Depending on when you file, you might be entitled to up to half of what your qualified spouse receives. However, you’ll need to devise a strategy to receive as much as possible from the Social Security Administration. Here are a few of the most frequent mistakes to avoid when applying for Social Security spousal benefits.

Not Filing for Benefits

It may seem intuitive that someone who has never worked shouldn’t file for Social Security benefits. Ultimately, if you haven’t paid any Social Security taxes from your salary into the system, there should be no benefit waiting for you when you reach retirement age. However, if you’re at least 62 and married or look after a child 16 or younger who’s entitled to benefits based on your spouse’s record, you can apply for your own spousal benefits, which may be pretty substantial. If you file at your full retirement age (FRA), which is 67 for people born in 1960 or after, your spousal benefit might be up to 50% of your spouse’s. The best is that the Social Security Administration will always give you the larger amount you’re entitled to, whether based on your own record or that of your spouse. Thus, even if you’ve never worked or contributed to the Social Security system, filing for benefits makes sense if you’re married.

Filing Too Soon

To receive the full 50% spousal benefit, you must wait until you reach FRA before filing for benefits. You can register for spousal benefits as early as age 62, just as you would for your own primary Social Security benefit. Your monthly benefit, however, will be permanently diminished.

Filing Too Late

If you apply for Social Security benefits based on your own record, the more you wait — until 70 — the larger your payout. For example, benefits grow by 8% every year from the FRA of 67 to age 70.  That’s a substantial, risk-free increase in your profits, making it beneficial to wait if possible. However, spouse benefits aren’t the same. Although your check will permanently decrease if you submit before your FRA, you won’t receive the income increase that primary beneficiaries would receive if they wait until 70. That means you’ll get the same spousal benefit, no matter whether you file at FRA or age 70. That’s why you should generally collect your spousal benefit no later than your FRA.

Overlooking Ex-Spouse Benefits

Even if you’re divorced, you might be eligible for spousal benefits based on your ex-spouse’s employment record. That’s most likely one of the most overlooked components of the Social Security spousal benefit. To get spousal benefits from an ex-spouse, you must have been married for at least ten years and be at least 62 years old. You also cannot have remarried. If you divorced when you were younger, you wouldn’t lose your future rights to spousal benefits; you’ll only be ineligible to collect them until you reach 62.

Nonetheless, at that point, ex-spouses are eligible to receive the same spousal benefits as if they were still married to the principal beneficiary. If you choose to stay unmarried, those benefits can extend for the remainder of your life or until your ex-spouse dies, whichever happens first. However, you may be entitled to survivor’s benefits at that point. A noteworthy aspect is that remarrying after 60 – or after 50 if you have a disability – won’t affect your eligibility for survivor benefits based on your previous spouse’s employment record. On the other hand, spousal benefits often end with remarriage at any age.

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After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

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Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.