Planning for retirement may not be the most fun conversation topic (it’s too far away, is it even attainable, etc.) but being prepared for when you stop receiving income can mean the difference between the retirement you want and a stressful, unhappy one. Even when you have your retirement savings plan in order and understand your benefits, it is important to consider that your decisions affect more than just yourself, especially your choices about Social Security. Check out these reasons you should work together to plan a Social Security strategy.
A Multiple-Choice Question
Your Social Security benefits are calculated based on the year you were born, the year you plan to begin taking your benefits, your annual income in working years and whether you are single or married. There are many combinations open to people who are married and both eligible for benefits. If a partner reaches full retirement age and suspends benefits, the other can claim spousal benefits equal to 50% of the filer’s benefits. One of you may also be eligible for ex-spouse benefits or survivor benefits from a previous marriage. You can work together to calculate the various options and how much different permutations enable you both to collect.
Because your benefits are impacted by your status and when you elect to begin taking them, it’s important to talk with your spouse and loved ones to see what age makes the most sense for you as a group. You may want to hold off on the excitement of receiving monthly checks so that your benefits can grow. People can begin getting Social Security benefits at age 62 but will receive more money in monthly benefits by waiting longer (the maximum benefits can be taken at age 70). When you elect to take benefits will impact how big your check is for the rest of your life. You can work with your significant other and family to see how your different options affect your budget.
If you are entering Social Security age, you may want to consider what you are leaving behind. Even if you have a will and a life insurance policy, you can use Social Security benefits to help source survivor benefits. If your Social Security benefits will make up most of your spouse or minor children’s income when you die, it is important to discuss your method together. When you elect to take benefits not only impacts the size of your monthly check, it also impacts how much your survivor(s) receive.
It’s a good idea to do some research and discuss your plans with your spouse and a financial expert. Keep in mind that you and your spouse’s debts can eat away at your benefits, so keep an eye on your liabilities as well as your assets.
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