Taking time off work to care for a spouse, parent or child can take a big toll on your retirement income. Even short caregiving breaks may reduce monthly payout because Social Security benefits are based on lifetime earnings.
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The good news is that there are strategies to protect and maximize these benefits. From spousal claiming options to delaying retirement and correcting records, here’s how to make the most of your Social Security after stepping away to care for family.
Know How Caregiving Breaks Impact Social Security
Social Security benefits are calculated using the highest 35 years of earnings. Caregiving years with zero or reduced income can lower that average, making it essential to plan around potential gaps.
“If you had to take a couple of years off to care for someone, it may have little or no impact on your benefit,” said Jay Zigmont, PhD, certified financial planner (CFP) and founder of Childfree Trust. “The key is to visit SSA.gov and review your personalized report.”
“For many people, going back to work for an equal amount of time as you took off to care for a loved one may even things out,” Zigmont explained. “The challenge is that you may struggle to secure a high-paying job after taking a few years off.”
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Use Spousal and Survivor Benefits
Spouses or ex-spouses may qualify for up to 50% of a working spouse’s Social Security benefit at full retirement age, even with limited or no work credits of their own, according to National Council on Aging.
Caregivers under 62 who are raising a minor or disabled child may also qualify for spousal benefits without waiting until retirement age.
In the event of a spouse’s death, survivor benefits can provide up to 100% of the deceased worker’s benefit, depending on the survivor’s age and timing of the claim.
Delay Claiming for Higher Payments
Delaying Social Security beyond full retirement age can increase monthly benefits and help offset the income lost during caregiving years.
“By delaying payments until full retirement age (age 67 if born in 1960 or later) or even until age 70, the monthly Social Security amount will be enhanced,” said Lisa Cummings, an estate attorney who works with clients on estate planning.
“Each year you delay taking Social Security payments to age 70 will result in an approximate 8% increase in your monthly benefit amount,” Cummings said.
Take Advantage of Workplace Benefits While Caregiving
Continuing to work, even part-time, allows caregivers to keep contributing to an employer’s 401(k) plan, benefit from matching contributions and maintain access to health coverage.
“While the individual continues to work, they should also consider participating in their employer’s High-Deductible Health Care plan and contributing to a health savings account (HSA),” Cummings said. “By contributing to an HSA, the individual can set aside tax-free dollars now to use for retirement health care costs and never have to pay income tax on those contributions.”
Keep Your Earnings Record Accurate
Errors or missing income on Social Security records can reduce lifetime benefits. Regularly checking and correcting statements is especially important for caregivers who work part-time while providing family support.
“Individuals who are in their 40s and 50s should first take the proactive step in determining your current Social Security wages reported to date,” Cummings said. “You can do this by setting up an account at ssa.gov/myaccount. This account will show you actual wages reporting and also project your monthly projected Social Security benefit at a variety of commencement ages.”
With careful planning, caregivers can protect their retirement income and make the most of Social Security benefits, even after stepping away from the workforce to support loved ones.
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This article originally appeared on GOBankingRates.com: How To Make the Most of Your Social Security When You Take Time Off To Care for Family
