Getting married is a major life event. It requires a lot of planning that goes beyond the ceremony, especially when it comes to your finances. In addition to making sure you and your partner have similar spending habits and financial goals, you may want to consider planning for your lives in retirement. This may seem premature, but in the world of personal finance, it’s never too early to plan for your retirement.
An important part of planning is knowing what benefits you’ll have once you clock out from work for good.
The Social Security benefits of marriage
You’re probably aware that marriage brings certain financial benefits. For some, this could mean tax breaks or better access to health insurance, but it could also lead to bigger Social Security benefits. To qualify for Social Security benefits you must be at least 62 and have worked long enough to earn 40 credits, but there’s an exemption for married couples. The Social Security Administration provides benefits to both spouses, regardless of who brought home a paycheck.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
This means a stay-at-home parent is eligible for benefits, even if they’ve never entered the workforce, but some other requirements must be met.
Some Social Security qualification basics
Generally speaking, you must be married for at least a year to qualify for spousal benefits. You must also be at least 62 years old, unless you’re caring for a biological child under 16, or a child who is already receiving Social Security disability benefits. However, your spouse must file for Social Security before you can receive spousal benefits regardless of age.
As for the actual payment, a married person can collect benefits based on their earnings or receive a maximum of 50% of their spouse’s Social Security benefits. The government will calculate both scenarios, basing your payment on whichever amount is greater.
Situations where your spousal benefit may be reduced
Now there are some caveats to spousal benefits. If you file to start taking your benefits before your full retirement age, your spousal benefit will be reduced. However, it’s important to note that simply claiming spousal benefits will not impact your spouse’s checks. Another caveat to this system applies to certain workers. If you receive a pension from a government job and you’re not required to pay into Social Security while working there, your benefits and your spouse’s benefits will be reduced by two-thirds of the amount of your pension.
Whether you’re planning a wedding or are a newlywed couple, it’s important to explore all the options you have at your disposal when planning for life in retirement. Social Security is a great benefit to have. But to live comfortably, you must start saving for your retirement as soon as possible. Consider talking with your spouse about opening an IRA or high-yield savings account. Also, check out employer-sponsored retirement accounts.
Taking the time to kickstart your retirement plan now will save you a lot of stress in the future.
Related Content
-
Stock Market Today: Markets Turn Lower on Nasty Inflation SurpriseEquities sold off after a hot reading on consumer price inflation pushed back rate cuts to autumn or year-end.
-
Social Security Payments Were Suspended for Some Americans Abroad. Were You Impacted? If So, Here's What to DoRetirees living abroad must complete a questionnaire every 1 to 2 years when sent by the SSA. Failure to respond can lead to the suspension of your benefits; here's how to fix it.
-
These Two Issues Are Critical to Efficient Retirement PlanningYou're saving hard for retirement, but if you're not thinking ahead about taxes and the cost of health care, your savings — and your legacy — could be at risk.
-
How to Use Good Debt (While Identifying and Avoiding Bad Debt)Not all debt is bad, but knowing the difference between good debt and bad debt and how to use them can help you get ahead financially and stay ahead.
-
Four Potential Tax Changes to Keep Your Eye OnMany taxpayers may be surprised by a larger tax bill if the TCJA isn't extended. Check out these proactive strategies to help mitigate some of the impacts.
-
What Can Happen if You Live Together Without a Cohabitation Agreement?Lots of people live together without being married, and there's nothing wrong with that, but if things go south or one partner dies, complications can ensue.
-
Six Risks of Delaware Statutory Trusts in 1031 ExchangesHere's how proper preparation can help you successfully navigate these DST risks, from market uncertainties to structural limitations.
-
Financial Strategies Borrowed From the Big Game's PlaybookLike the best football teams, you can win at financial planning by executing a strategy, making halftime adjustments and staying focused on the ultimate prize.
-
Three Ways to Plan Now for a Social Security Shortfall LaterThe outlook for Social Security is gloomy, but you can save now to protect against benefit cuts later. If the cuts don't happen, you'll still be better off.
-
Extra Cash? Should You Pay Off Debt or Invest?Depending on your financial situation, you might benefit from paying off debt, investing or both. Here are some things to consider before deciding.
