Social Security Benefits After Marriage: What You Need to Know
Retirement involves navigating various financial considerations, and one of the most significant is how collecting Social Security benefits will be affected by marriage. This article explores the intricacies of how Social Security benefits change or remain the same after getting married.
Combined Social Security Benefits: An Overview
When two retired individuals decide to marry, their Social Security benefits may or may not combine. The amount of combined social security benefits can be a topic of confusion, especially for those with varying earnings.
Under certain conditions, the lower-paid spouse can receive an amount equal to 50% of their higher-paid spouse's earned benefit. If the higher-paid spouse passes away, the lower-paid spouse can receive their own full benefit.
Do Combined Social Security Benefits Affect Each Other?
Each spouse receives a check based on their individual earnings before retirement. There is no direct combination of these benefits. When one spouse receives a check based on their own earnings, the amount is not directly impacted by the other spouse's benefits.
Impact of Social Security Benefits on SSI
If one spouse is collecting Social Security Disability Insurance (SSDI) and the other has Supplemental Security Income (SSI), the situation can become complicated. An increase in the Cost of Living Adjustment (COLA) can impact only the SSDI benefits, while SSI benefits may decrease proportionally. This can lead to a situation where costs of living increases are not fully offset by this adjustment.
The example provided of a couple where the husband has SSI and the wife has SSDI, and a COLA increase of 5.9% in 2022, illustrates how their respective benefits can negatively impact each other. In such cases, the only recourse might be to appeal through Congress or seek further assistance from government representatives.
Survivor’s Benefits and Remarriage
The rules for survivor’s benefits and remarriage are nuanced. If one partner remarries before the age of 60, they become ineligible for survivor’s benefits from their previous spouse until their marriage ends. However, after reaching the age of 60, the individual can receive higher spousal benefits from their new spouse without a reduction.
Effect of New Spouse’s Benefits
If one partner is collecting a spousal benefit from a previous marriage and their new spouse has a smaller benefit, their existing payments can decrease. This is a crucial consideration to understand when planning for retirement post-marriage.
Tax Implications of Social Security Benefits
Taxability of Social Security benefits depends on the total income, which includes other tax-exempt interest and half the benefit. For individuals, the threshold is up to 50% until the income reaches $34,000 ($25,000 for singles), after which it increases to 85%. For married couples, the thresholds are $32,000 and $44,000.
Understanding these tax implications can help in better financial planning, ensuring that the maximum benefits are retained and utilized effectively.
In conclusion, navigating the impact of marriage on Social Security benefits requires careful consideration of various factors, including combined benefits, SSI, survivor’s benefits, and tax implications. By understanding these intricacies, individuals can make informed decisions and maximize the benefits available to them.