If you’re struggling with retirement planning, the first thing to know is that you aren’t alone. Not only is the cost of living increasing, but not everybody can access a pension, and saving is becoming increasingly difficult with debts such as student loans. With this, there’s a reliance on Social Security benefits for many older Americans. The Social Security Administration says that the average monthly benefit is now $1,500, which makes a big difference when attempting to enjoy a comfortable retirement.
Generally speaking, all those eligible for Social Security have paid tax for at least ten years. This being said, those without ten years of payroll taxes may have options to receive Social Security benefits anyway. There are three ways you can get around the lack of work experience:
Firstly, those who were married for longer than ten years and are now divorced may have access to divorce benefits (as the name suggests, you can’t be married to claim). To calculate the amount you’ll receive, it’s currently set to 50% of your ex-partner’s FRA amount. It’s important to note that you can’t claim if your ex-spouse hasn’t started claiming. However, a separate claim is allowed if your divorce was over two years ago.
Don’t worry, receiving Social Security benefits in this way won’t reduce the amount received by your ex-partner. Even if your ex-spouse has moved on and married again, you can still claim as before.
In truth, spousal benefits work in much the same way as divorce benefits do, but they are designed for married couples still together. Using the work record of your partner, up to 50% of their FRA monthly benefit amount is available to you too. As we saw before, this doesn’t affect the amount claimed and received by your spouse.
What are the stipulations for spousal benefits? You can only receive a maximum of 50% of what your spouse is set to receive at full retirement age (FRA), you must be 62 or older, and you’ll receive a reduced amount if you claim before your FRA. In other words, you can’t claim before your FRA and still get 50%.
The third scenario is designed to support widows who were financially reliant on their spouse before their passing. After losing a spouse, individuals can claim a survivor benefit based on the spouse’s work history. As well as spouses, this benefit is also available to divorced spouses, parents, children, and sometimes even other family members.
Unlike the first two options, no hard and fast rule decides the amount you receive as a survivor benefit. The amount depends on the following factors:
• The age of the deceased
• Your own age
• Number of people claiming survivor benefits
If you’re currently at FRA, you can take over as the recipient of full benefits if this is what your spouse was collecting before passing.
‘I’ve never worked, can I claim Social Security?’ – As you can see, the answer to this is ‘yes.’ There are three common scenarios where this occurs, including spousal benefits, survivor benefits, and divorce benefits.