What Is The Marriage Penalty For Social Security?

The marriage penalty is a tax issue that affects older married couples with modest incomes and Social Security benefits. They must pay tax on their benefits if their base amount is more than $32,000, but this does not impact their Social Security retirement benefit, which is based on their work record and earnings history. If they are the parents of their spouse’s child, the one-year rule does not apply. However, they both receive Supplemental Security Income (SSI), which results in a loss of about $300 in combined income monthly if they get married.

The maximum Social Security retirement benefit for married couples is $9,110 a month in 2023 if spouses earn high wages while working and start benefits at 70. If they retire at 62, they will receive $2,000 minus 30% of $2,000 or $1,400 per month, a difference of $600 per month less compared to waiting until their full retirement age. This difference is locked in and can be deducted from benefit payments for every $2 earned above the annual limit.

Recent reforms to these systems have been designed in part to reduce marriage penalties in tax and social insurance systems. For example, the maximum monthly SSI benefit rate for a married couple in 2022 is $1,261, which is $421 less per month than two unmarried SSI beneficiaries.

Older married couples with modest incomes and Social Security benefits must pay tax on their benefits if their base amount is more than $32,000. The SSA may count individuals as married if they act married, even if they are not.

What is the highest social security payment?

The maximum Social Security benefit at full retirement age is $3,822 per month in 2024. It is $4,873 per month if you retire at age 70 and $2,710 if you retire at age 62. Your Social Security benefit depends on your earnings, your full retirement age, and when you start getting benefits. Get more financial clarity with the NerdWallet app. Track your budget in one place.

What is the Social Security spousal benefits loophole?

If you remarry, you can no longer get Social Security benefits based on your ex-spouse’s earnings. There are two exceptions to this rule. The first exception is the Social Security spousal benefits loophole. This lets someone who remarries at 60 or later get survivors benefits if their second marriage ends before their first spouse dies. This loophole lets you keep your benefits even if you remarry.

9. Retaining Survivor Benefits for Disabled Ex-Spouses. Insider Monkey Score: 6 Another exception to the Social Security termination after remarriage is that ex-spouses with a disability who remarry at age 50 or older can also keep their Social Security survivors benefits. The rule understands that disabled people have special needs and lets them keep their benefits.

Can my spouse collect half of my Social Security?

If you get Social Security retirement benefits, some of your family members may also get benefits on your record. If they qualify, your ex-spouse, spouse, or child may receive up to half of your retirement benefit. Your family’s Social Security payments won’t affect your retirement benefit.

Maximum family benefits. We can only pay so much to your family. The total varies depending on your benefit amount and the number of family members on your record. Your family can receive about 150 to 180% of your full retirement benefit. If you have a divorced spouse who qualifies for benefits, it won’t affect your or your family’s benefits.

When should a spouse take social security?

To claim a spousal benefit, the low earner must wait until they reach age 62 or until the high earner claims their own benefit. If the low earner claims the spousal benefit at or after FRA L, her benefit amount is the PIA S.

The author is with the Social Security Administration.

Acknowledgments: I thank Barbara Smith, Laith Alattar, Glenn Springstead, Mark Sarney, and Elisa Walker for their comments and suggestions. The author’s views are not necessarily those of the Social Security Administration.

What is the best social security strategy for married couples?

In this situation, it’s often best for the husband to start collecting Social Security at 70, while the wife starts at her full retirement age or even earlier.

What is a SS loophole?

The loophole for restricted applications. You may know that you can delay your Social Security benefits. The longer you wait, the more you get each month. One loophole let married people start getting a spousal benefit at full retirement age, while letting their own benefit grow. This was done by filing a restricted application. A restricted application lets you choose which benefit you want when you file for benefits. For those born in 1953 or earlier, the restricted application strategy may be an option. But as of January 9, 2023, this loophole has basically closed. Anyone born in 1953 or earlier is either already 70 or will be turning 70 in 2023. Social Security benefits can’t be delayed or increased beyond age 70. Also, some other things needed to be in place before using the restricted application. Your spouse must have been getting benefits when you filed your restricted application. Your spouse would have to be born around 1958 or earlier to take advantage of this. They would have needed to be at least 62 to file for their own benefits when you filed your restricted application.

Can I collect my husband’s social security while he is collecting?

If you qualify for your own retirement and spousal benefits, we will always pay your own benefits first. If your spouse benefit is higher than your retirement benefit, you will get the higher amount. For more info, go to the Benefits for Your Family page.

Can a SS be suspended?

If you are already getting benefits, you can stop getting them before you turn 70. Your benefits will be suspended the next month. If you are over 65 but not yet 70, you can ask us to suspend your retirement benefit payments. This will give you a higher benefit payment. Before you suspend your benefits, remember: The month after you make the request. Your full retirement age. The month you are entitled to benefits (for initial claims only).

What is the maximum Social Security benefit at age 65?

Your benefit depends on your retirement age. If you retire at full retirement age in 2024, your maximum benefit is $3,822. If you retire at 62 in 2024, your maximum benefit is $2,710. If you retire at 70 in 2024, your maximum benefit is $4,873.

Can I draw my husband’s Social Security if he is younger than me?

For each couple, I calculate the number of possible claiming ages for each entitlement class and spousal-benefit claiming contingency. For the spousal-benefit-only and dual entitlement classes, I find the earliest and latest age to claim spousal benefits. The earliest eligible CAS is either 62 or the low earner’s age when the high earner reaches 62. The earliest eligible CAS also determines the minimum value of MBS. The latest advantageous CAS is the one to which the low earner may have to delay to maximize the MBS. It is the older of FRAL (if the high earner has claimed his own-record benefit) and the low earner’s age when the high earner reaches 70. For a given LBY, the same pair of earliest and latest CAS applies to both spousal-benefit-only and dual entitlement classes.

Results and Analysis. The computations produce three sets of results. The first set is the number of possible claiming ages for each couple by entitlement class and spousal benefit claiming. The second set is the range of earliest and latest CAS values for each couple. The third set is the range of low earners’ monthly benefit amounts for each sample couple by entitlement class. The results are explained below.

Claiming-Age Combinations by LBY and Entitlement Class. A couple with a low earner in the own-record-only entitlement class selects the CAH and CAL; there is no CAS. Because the CAH and CAL are independent, there are 97 potential monthly claiming ages between ages 62 and 70, so there are 9,409 possible combinations. All couples in the own-record-only entitlement class have the same claiming age combinations, regardless of their birth years.

How do I get the $16728 social security bonus?

Did you hear about the $16,728 yearly Social Security bonus? There’s no extra money for retirees. The SSA uses a formula based on your lifetime earnings to determine your benefit amount. Try this: 10 Best (and Worst) Places to Retire Without Savings One way to grow your retirement savings in 2024 is to maximize your benefits.

Do married couples each get their full Social Security?

If you are married and have worked and earned enough credits, you will each get your own Social Security benefit.