Planning ahead and getting an accurate picture of your options may be key to getting the most out of your retirement. However, a survey commissioned by Massachusetts Mutual Life Insurance Company (MassMutual) aimed to better understand how much Americans know about Social Security retirement benefits suggests many may be leaving Social Security retirement benefits they’re entitled to on the table, or incorrectly assuming what benefits may be available in retirement. Here are some the most common questions and answers for people of all ages:
My spouse can qualify for Social Security retirement benefits, even if he or she has no earnings history. True! Many spouses choose to stay at home to raise children or otherwise spend extended periods of time outside the paid workforce. This can affect a spouse’s ability to qualify for Social Security benefits. In such cases, the spouse who earns less may be eligible for a Social Security spousal benefit. A spousal benefit can be as much as 50 percent of the higher earning spouse’s full retirement age benefit. The exact percentage will depend on whether or not each spouse has reached his or her full retirement age.
As a divorced person, I can collect Social Security retirement benefits based on my ex-spouse’s earnings history. True! You may be eligible to receive retirement benefits based on your ex-spouse’s earnings record, provided your marriage lasted at least 10 years, you are currently unmarried, you are at least 62 years old and the benefit you would receive based on your personal earnings history is less than the benefit amount you would receive if you filed for benefits based on your ex-spouse’s earnings record. If your ex-spouse has not yet applied for retirement benefits, but qualified for them, you can collect benefits based on his or her record provided that you have been divorced for at least two years.
Under current Social Security Law, full retirement age is 65. False! Your full retirement age is based on the year you were born. For people born between 1943 and 1954, the full retirement age is 66. If you were born in 1960 or later, the full retirement age is 67. For anyone born between 1955 and 1959, the full retirement age increases gradually.
Once I start collecting Social Security, my benefit payments will never change. False! The Social Security Act of 1973 included a provision for cost-of-living adjustments (COLAs) to help Social Security benefits account for inflation. Each year, the Social Security Administration uses specific indexes and formulas mandated by this legislation to determine whether a COLA will apply to benefits paid in the coming year and if so, how much the increase will be.
If I file for retirement benefits and have minor dependent children, they also may qualify for Social Security benefits. True! When you file for Social Security retirement benefits, your children may also qualify to receive benefits based on your record. An eligible child can be your biological child, adopted child or stepchild. A dependent grandchild may also qualify. Normally, benefits stop when children reach age 18 unless they are disabled. However, if the child is still a full-time student at a secondary school at age 18, benefits will continue until the child graduates or until two months after the child becomes age 19, whichever is first.
I must be a U.S. citizen to collect Social Security retirement benefits. False! You do not have to be a U.S. citizen to qualify for Social Security retirement benefits. Resident aliens who pay into the Social Security system may qualify to receive retirement benefits, assuming they earn enough credits and meet additional criteria. To become part of the Social Security system, non-U.S. citizens must have lawful alien status, permission by the U.S. Citizenship and Immigration Services (USCIS) to work in the U.S. and a Social Security Number.
I can continue working while collecting my full Social Security retirement benefits — regardless of my age. False! You can work and receive Social Security retirement benefits. However, if you have not reached full retirement age, your earnings will be subject to the retirement earnings test. If your income exceeds the test limit, Social Security may withhold all or a portion of your benefits. Withheld benefits are repaid over your lifetime once you reach full retirement age.
Final decisions about Social Security filing strategies always rest with you and should always be based on your specific needs and health considerations. It is important to acquire as much information as possible in order to make an informed Social Security claiming decision because one year after the Social Security claiming decision is made, it cannot be changed.