Whereas married Individuals maintain many misconceptions about optimum Social Safety claiming methods, there are a number of key misunderstandings that appear to be dogging {couples} in 2023, warns Jeff Levine, Buckingham Wealth Companions’ chief planning officer and Kitces.com’s chief monetary planning nerd.
For instance, as Levine shared throughout Buckingham’s newest monetary planning webinar, many {couples} with uneven earnings histories errantly consider that their particular person Social Safety main insurance coverage quantities, or PIAs, will change relying on the date the upper earner claims.
There are components that affect the upper earner’s PIA, however the claiming date of every member of the couple isn’t considered one of them. As Levine defined, the upper earner’s PIA is just the sum of three separate percentages of sure parts of that employee’s common listed month-to-month earnings, or AIME.
“It’s crucial for {couples} to grasp that, whether or not the higher-earning employee claims early at 62, or claims at their full retirement age or past, this resolution doesn’t really influence the upper earner’s PIA,” Levine stresses. “That is necessary to grasp as a result of the decrease earner’s spousal profit goes to be set at 50% of the upper earner’s PIA.”
Based on Levine, this dynamic is a serious level of confusion for a lot of {couples}.
“It’s so necessary to grasp the truth that the upper earner’s PIA doesn’t change relying on after they declare. It’s calculated after they flip 62,” Levine says. “With regards to maximizing a pair’s Social Safety revenue, what tends to matter extra is when the decrease earner partner claims, and whether or not that’s at their full retirement age or not.”
See the slideshow for different prime insights from Levine relating to the necessary methods {couples} could make errors within the claiming course of, probably robbing themselves of tens and even a whole bunch of hundreds of {dollars} in lifetime wealth potential.
(Pictured: Jeffrey Levine)