How Much Can a Couple Make on Social Security?
Social Security is a crucial component of retirement planning for many Americans. It provides a steady income source for retirees, ensuring that they can maintain a comfortable lifestyle after they stop working. However, one common question that arises is: how much can a couple make on Social Security? The answer to this question depends on several factors, including their work history, income level, and the age at which they begin receiving benefits.
Understanding Social Security Benefits
Social Security benefits are calculated based on an individual’s earnings history. The more they earn and the longer they work, the higher their monthly benefit will be. For couples, the calculation becomes slightly more complex. The Social Security Administration (SSA) considers both partners’ earnings when determining the total benefit amount.
Calculating the Maximum Benefit
The maximum benefit a couple can receive is based on the higher-earning individual’s earnings history. According to the SSA, the maximum monthly benefit for a worker who retires at full retirement age (FRA) in 2023 is $3,895. However, this amount can vary depending on the worker’s actual earnings and the age at which they begin receiving benefits.
Impact of Early or Delayed Retirement
If a couple decides to retire early, their monthly benefit will be reduced. For example, if they choose to retire at age 62, which is the earliest age they can begin receiving benefits, their monthly benefit will be approximately 30% less than the full retirement age benefit. Conversely, if they delay retirement until age 70, their monthly benefit will increase by approximately 8% for each year they wait.
Spousal Benefits
In addition to their own retirement benefits, a spouse may also be eligible for spousal benefits. These benefits are calculated based on the higher-earning spouse’s earnings history. If the lower-earning spouse has little or no work history, they may still receive a spousal benefit equal to half of the higher-earning spouse’s benefit, provided they meet certain criteria.
Considerations for High-Income Couples
For couples with high incomes, there are additional considerations to keep in mind. The SSA applies a earnings limit to individuals who earn more than a certain amount. In 2023, the earnings limit is $21,240 for individuals who are younger than their FRA and $50,520 for those who are at or above their FRA. Any earnings above these limits may reduce their Social Security benefits.
Conclusion
Determining how much a couple can make on Social Security requires careful consideration of their work history, income level, and retirement age. By understanding the factors that influence their benefits, couples can make informed decisions about their retirement plans. It’s important to consult with a financial advisor or the SSA to ensure they maximize their Social Security benefits and enjoy a comfortable retirement.
