The Social Security partner rule, which had been in place for decades, ended this year for people who turned 70 on January 1, 2024. Beneficiaries could switch between their own benefits and those of their wives in order to get the most money. But because the rule changed in 2016, if you were born before January 1, 1954, you can’t get the benefit.
People who were married may have put off getting benefits and instead claimed spousal benefits when the rule ran out. Because the person put off retiring, they would start getting benefits at age 70, which is when they would get the most money from Social Security each month.
3 things you should consider for your Social Security spousal benefits from now on
The Bipartisan Budget Act of 2015 changed the rule so that people who turned 62 after January 1, 2016, could no longer use this method to get the most out of their Social Security income. Since that clause is no longer in effect, you need to come up with other ways to get the most out of your spouse benefits. These three things are what you should do:
Review your estimated benefits and plan ahead
To get the most out of your Social Security spousal benefits, you need to talk about who should get the money and when. The person who makes the least money gets the bigger of the individual or spousal payments from Social Security.
Couples who are claiming benefits should create an online account with the Social Security Administration so that they can see how much money they will get at different claimed ages. Matthew Allen, co-founder and CEO of Social Security Advisors, told MarketWatch that married people should start planning for their Social Security right away.
If you can, avoid claiming benefits before the full retirement age
As GOBankingRates has said before, a person’s Social Security benefit relies on how long they worked and when they filed their claim. You can start getting benefits as early as age 62, but most people now retire at age 67. There will be a permanent 30% cut in your payments, though.
The least you’ll get each month is $1,400 if you file at age 62, even though you can get $2,000 at age 67. Because of this, the amount the main beneficiary gets is closely linked to the amount a spouse gets from Social Security. Also, if your partner starts getting benefits at age 62, you will no longer get any spousal benefits.
Delaying benefits until 70 might not be the best option either
In general, the longer you wait to start getting Social Security retirement benefits, the more you will get. If you wait until you reach full retirement age, you will get the full benefit that you are eligible to. If you wait until you reach age 70, you will get the most benefit. If a worker claims their retirement benefits early, like at age 62, they will be lessened. If they wait, their benefits will be increased.
By law, spouses can only get half of the main beneficiary’s entire retirement benefit. This means that they can’t benefit from the age 70 rule. Even if your spouse didn’t start getting benefits until age 70, your maximum benefit would still be 50% of the main beneficiary’s FRA benefit amount.
Where can retirees move to avoid paying Social Security taxes?
Delaware
- State sales tax and average local tax: 0%
- State social security tax: None
- Effective property tax: 0.61%
- Income tax rate (65+): flat rate from 2.2% to 6.6%.
Delaware has no state or local taxes, which is good news for its residents. However, there is a graduated income tax that will affect your income.
New Hampshire
- State sales and average local tax: 0%
- State tax on Social Security: None
- Effective property tax: 1.93%
- Income tax rate (65+): 4% (applies only to interest and dividends income)
For retirees who want to avoid paying taxes, New Hampshire is one of the best places to live in. It doesn’t have a sales tax, a state income tax, or a Social Security tax. The only tax it has is a flat 4% tax on interest and bonus income. You will have to pay Uncle Sam a lot of money in property taxes if you buy a house there, though.
Wyoming
- State sales and average local tax: 5.36%
- State tax on Social Security: None
- Effective property tax: 0.56%
- Income tax rate (65+): 0%
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