It may cost more than you expected.
Think tank proposes capping Social Security benefits at $100,000
A Washington think tank has proposed capping annual Social Security benefits for married couples at $100,000 as a way to reduce a looming deficit in retirement trust funds.
You pay into Social Security your entire career. With 6.2% of your income coming out of your paycheck before it hits your bank account, you’d expect a good chunk of that to come back to you in retirement, but that’s not always the case.
People with a short work history may not qualify for Social Security or may only receive small benefits. Let’s take a closer look at how this affects you.
You must have at least 10 years of work experience to receive retirement benefits.
To qualify for Social Security retirement benefits, you must earn 40 work credits. Credits are defined as $1,890 in 2026 earnings, and you can earn up to 4 credits per year. Although the definition of credits changes each year, it is still low enough that many part-time workers should be able to earn credits.
If you have not completed 40 credits, you cannot claim retirement benefits. However, even if you are married, you may be eligible to receive spousal benefits based on your partner’s work record.
Profit may be less than expected
The Social Security Administration considers your 35 years of highest income when calculating your benefits. You can qualify even if you have a short work history, but periods of zero income will also be taken into account, which will reduce the size of your check. Just one of them can cost you thousands of dollars over your lifetime.
You can avoid this by working for at least 35 years before applying. If you can do that, there is nothing wrong with working longer hours. If you earn more now than you did in the past, your recent high-earning years will gradually start to push out earlier, lower-earning years from your benefit calculations, resulting in a larger check.
If you are married, spousal benefits can be more expensive than retirement benefits
Married people may be eligible to receive spousal benefits if their partner is eligible for retirement benefits. However, you cannot claim spousal benefits and retirement benefits at the same time. The Social Security Administration will only give you the larger of the two, and you can’t claim spousal benefits until your partner enrolls.
If you have a short career and only receive a small amount of retirement benefits, your spousal benefits are likely to be higher than your retirement benefits. You can also claim severance first and your partner can delay claiming severance for a few months or years. This increases their profits. Then, once they sign up, you can switch to spousal benefits.
Discuss your options with your partner and make sure you’re on the same page about who charges and when. If you have questions about your benefits, please contact the Social Security Administration.
The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner providing financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
