When planning for your retirement, you will probably take into account your own family situation and life goals, while coordinating income from Social Security with other resources at your disposal. We have found that knowledge of the ins and outs of Social Security is a great tool as you fashion a solid retirement income strategy.
So here are a few questions we have gotten recently about Social Security benefits and retirement:
Question: What happens to my Social Security benefit if I keep working?
Answer: Your earnings record will continue being updated. Since your Social Security benefits are based on the highest 35 years of earnings, the impact can vary. If you replace zero or lower earning years from the past, your benefit will go up. If you are working part time or not earning much now – or if you already have 35 years of high earnings when you paid into Social Security – then your benefit will be the same or close to it.
Question: I am divorced. Can I get Social Security based on my ex-spouses earnings record? Can I still build my own benefit too?
Answer: Maybe. This can be a good strategy to increase your own benefit and get more over your lifetime. However, here are some things to consider: You must currently be unmarried, the marriage must have lasted 10 years or more and your ex-spouse must be at least 62 years old.
In addition, if the divorce took place more than two years ago, your ex-spouse does not need to have filed for their own benefit. You can claim on your ex-spouse’s earnings and delay your own benefit to build credits, then switch to your own benefit if it grows to be larger.
Question: What happens if I applied for Social Security benefits at full retirement age but now I want to get the 8 percent per year credit and COLA increases? Can I go back and suspend until age 70, or am I stuck?
Answer: If you are over full retirement age, you can suspend your benefit. It will build 8 percent annual delayed credits on the amount of the benefit at the time of suspension until you claim it at age 70.
Overall, you may want to consider the lifetime impact of claiming decisions, not only the short term amounts.
A maximization strategy may find many dollars in extra income, and figuring out coordination of spousal benefits and other resources can be valuable. The bottom line is that until you claim, your Social Security Benefit amount is not set in stone, and even then you may have options.
What are your biggest questions around leveraging Social Security benefits and retirement?