As you might expect, a program like Social Security is chock full of rules. Some of these may be obvious: the earliest age you can file is 62, and you’ll be financially rewarded if you delay your claim to some extent. But whether you’re thinking about filing for benefits this year or already receiving them, here are a few important things to know about Social Security.
You’ll often hear that if you want to receive Social Security in retirement, you’ll have to work for quite a few years and pay into the program. That’s generally true, but there may be another way to collect benefits without your own work history: spousal benefits.
You may be entitled to spousal benefits based on the file of your current or former spouse. But it’s important to know how partner benefits work.
Firstly, you can claim spousal benefits as soon as you turn 62. But if you file for spousal benefits before you reach your full retirement age, you’ll end up collecting a smaller amount of money each month for life.
That said, once you reach full retirement age, it pays to start claiming spousal benefits straight away. Social Security allows claimants who file for benefits based on their own earnings to accumulate deferred retirement credits for filing after full retirement age. These credits result in increased monthly payments. However, these credits do not apply to partner benefits, so there is no point in waiting.
You should also know that your spousal benefit is a maximum of 50% of what your spouse can receive at full retirement age. And while you have to wait for your spouse to file for Social Security to claim spousal benefits if you’re married, if you’re divorced you don’t have to wait for your ex-spouse.
Did you know that if you apply for social security too early and then regret your decision, you can cancel your application? Although this option is only available to you once in a lifetime, it does exist. But there are guidelines you must follow.
First, you must withdraw your claim for benefits within one year of claiming it. You must also pay back any money you paid to the Social Security Administration to have a chance of filing later. But if you’re successful, you may be able to undo an early claim and sign up later in life to lock in higher monthly payments.
Social Security recipients are allowed to collect benefits while working. Once full retirement age is reached, you can earn any amount of money without the risk of having your benefits withheld. But before that, you’ll be subject to a means-test limit.