Many Americans participate in the United States Social Security system without fully understanding how doing so will benefit them. With that said, most are aware that Social Security acts as an important source of income for retired workers, but fewer people are informed of the additional spousal benefits available to eligible married couples.
Today’s post addresses common questions about Social Security spousal benefits, including who is eligible, how spousal benefits work, and strategies for maximizing your post-retirement income. To learn about Social Security spousal benefits, read through for a thorough explanation, or click directly on a specific topic below.
Spouses, Survivors, and Social Security
Most American workers contribute to the Social Security system, a federal anti-poverty program designed to provide financial protection for retired and disabled U.S. citizens. However, even if you do not contribute to Social Security, you may be entitled to benefits through your spouse.
What are Social Security spousal benefits?
The Social Security Administration (SSA) issues benefits to retired workers as supportive income once the worker claims retirement benefits at or after age 62. Social Security benefits that may extend to the spouse are known as “SSA spousal benefits”.
Factors that may affect a family’s Social Security retirement benefits include:
- Whether you or your spouse receive benefits while continuing to work
- Different kinds of earnings (farm work; federal employment; military service; self-employment; W2 wages; etc.)
- Government pension offset
- Social Security credits
Note: In addition to retirement benefits, Social Security spousal benefits may be awarded if a worker becomes disabled or passes away.
How do spousal benefits work?
Many families are structured around a single head of household whose sole income contributes to the Social Security system. If he or she were to retire, become disabled, or pass away, the non-working spouse would likely face financial hardship without the supporting assistance of spousal Social Security benefits. According to SeniorCareAdvice.com, spouses make up 8.2% of Social Security beneficiaries; eligible children and widowers also make up a significant portion of beneficiaries.
What other benefits are available?
Some spouses have never worked and therefore have never paid Social Security tax, which means that claiming their partner’s spousal benefit may be their only source of income in retirement. However, you may be eligible to receive payments from a government pension or foreign employer not covered by Social Security. In this case, you may still be eligible to receive Social Security spouse benefits at a reduced amount.
Social Security Spousal Benefit: Eligibility
For a spouse to receive monthly benefits from the SSA, they must meet the eligibility criteria. About three million people currently receive benefits as spouses or children of retired workers; read on for more information below to see if you may become a beneficiary.
Who is eligible for Social Security spousal benefits?
Your spouse must file their own Social Security benefit before you can claim your spousal benefit. Additional qualifications state that an applicant must:
- Be at least 62 years old
- Be currently married to the primary recipient
Note: You may receive the spousal benefit, regardless of your age, if you are receiving benefits as a dependent.
How are spousal benefits calculated?
Eligible spouses may receive up to 50% of the primary recipient’s benefit amount. On average, spouses of retired workers receive $741.46 per month—but how the benefit amount is calculated depends on the spouse’s primary insurance amount (PIA), or the maximum amount of benefits a worker may receive once they reach the full retirement age (FRA).
Note: Taking a Social Security spousal benefit does not reduce or change the benefit amount that your current spouse, ex-spouse, or ex-spouse’s current spouse may receive. However, if both your spouse and your eligible children are receiving Social Security benefits, the total benefits paid to your entire family typically cannot exceed 180% of your full retirement benefit.
Social Security Spousal Benefit: Rules
Social Security spousal benefit rules help maintain the success of the program. In addition to eligibility criteria, there are guidelines pertaining to how the benefit amount is determined and how retirement credits are affected.
Social Security Rules for Nonworker Spouses
Many Americans qualify for Social Security due to their marriage history, even if their work history is nonexistent. If you are ineligible to claim your own benefits, you may be able to receive benefits based on your spouse’s record once you turn 62, or earlier if you’re raising your spouse’s child who is younger than 16 or disabled.
Nonworking spouses are entitled to 50% of the working’s spouses retirement benefit once they reach their own full retirement age (FRA). Note: the FRA is the age at which an individual is entitled to the full amount of their own SS benefit, if they qualify. For most people born after 1954, the FRA is between 66 and 67 years old. View the table below to see how a spousal benefit of $500 at FRA could be reduced by as much as 35% if it were claimed at 62.
Although you can claim spousal Social Security as early as 62—so long as your working spouse has already claimed his or her own SS benefit—claiming your benefit before you reach your own FRA will lead to a smaller monthly benefit. Your benefit amount will be reduced based on the number of months you claimed early; specifically, spousal benefits are reduced 25/36 of 1% per each month claimed early up until 36 months and 5/12 of 1% per each month exceeding 36.
Social Security Rules for Retired Worker Spouses
According to spousal Social Security rules, if you have your own working history that qualifies you for SS benefits, you cannot claim on behalf of both you and your spouse; you can only receive the higher of the two amounts.
Social Security Rules for Spouses with Dependent Children under 16
If you’re claiming spousal benefits before age 62, you will not see a reduction in benefit amount so long as you’re caring for your spouse’s dependent child under 16. However, your benefit will be subject to SSA maximum benefit rules which cap payments to family members based on a worker’s SS record to no more than 150% or 180% of the worker’s FRA benefit amount. (Note: SSA calculates the family maximum based on earning levels and benefits type.)
When spousal benefits and dependent benefits exceed this cap, they will see their benefit amount reduced equally between them.
Social Security Rules for Same-Sex Couples
The SSA recognizes same-sex couples’ marriages in all 50 states, including some nonmarital legal relationships. That means same-sex couples and their families may be eligible for Social Security benefits.
Social Security Rules for Ex-Spouses
Social Security benefits for divorced spouses depend on several factors. You may be eligible to claim benefits on your ex-spouse’s behalf if:
- The marriage lasted at least 10 years
- You are not remarried
- You are at least 62 years old
- Your ex-spouse is entitled to Social Security retirement or disability benefits; and
- The benefit you are entitled to receive based on your work history is less than the benefit you would receive based on your ex-spouse’s work history (you may receive a spousal benefit based on an ex-partner’s record even if he or she has not yet filed for their benefit, but your ex must be at least 62 years old at your time of filing).
Note: If you remarry, you most likely will become ineligible to receive your ex’s spousal benefits. To learn more about how marriage affects retirement income, including the implications of a reverse mortgage for a non-borrowing spouse, direct your questions to a GoodLife Representative.
If you are divorced and your ex-spouses passes away, you may be entitled to the standard spousal benefit so long as your marriage lasted at least 10 years and you are caring for a qualifying child.
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Social Security Rules for Widows and Widowers
If your spouse dies, you may be able to collect a Social Security survivor benefit as early as 60 years old. Widows and widowers who have reached their FRA will be eligible for the maximum benefit amount—100% of the deceased’s benefit amount. If you claim a survivor benefit before your FRA, it can be reduced to 71.5 – 99% of what the full amount would have been, depending on your age.
Widows and widowers have the option to restrict their application to file for either their survivor benefit or their own benefit, and then later switch to the other. For example, if your SS benefit will be higher at age 70 than your survivor benefit, you could claim the smaller benefit for a few years as a widow(er) then switch to your own benefit once you’ve maximized its amount.
Social Security Spousal Benefit: Strategy
As of 2016, new Social Security laws may affect how married couples strategize their Social Security claim. Unless you and your spouse made the 2016 cutoff date, you are no longer able to file-and-suspend your benefits for additional credits, nor can you file a restricted application for spousal benefits (unless you are a widow or widower).
When can I claim spousal benefits?
Once your partner has filed for his or her Social Security benefit, you may file for your spousal benefit as early as age 62. However, it may be in your best interest to wait to file Social Security until you reach the FRA in order to maximize your benefit amount.
What happens if I retire early?
If you collect spousal benefits before you reach your full retirement age, then the amount of your benefit will be permanently lowered for life—unless you are caring for a qualifying child. The reduction in benefits depends on how soon you retire, as the penalty for early retirement compounds each month; according to the SSA, your benefit could be reduced by as much as 35%.
Carefully consider the long-term consequences of claiming spousal benefits early. You’ll be reducing the benefit paid to you over the course of your lifetime and will also reduce the survivor benefit that either you or your spouse may be entitled to.
How can I maximize Social Security spousal benefits?
Filing early reduces your benefit, but Social Security benefits increase by a certain percentage for every year retirement is delayed past the FRA up until age 70. The basic principle suggests that the longer you defer benefits, the larger your monthly benefits may grow. The year you were born and the number of months you delay retirement determines how much your benefit may increase. For example, if you were born between 1943 and 1954, then your full retirement age is 66; if you choose to retire at that time, you would receive 100% of your benefits, and your spouse may be eligible to receive 50% of that value, as well. However, you can choose to increase your benefit and wait until age 67 for 108% of the monthly benefit for delaying 12 months, or wait until age 70 for 132% of the benefit amount for delaying 48 months.
Note: Delayed Social Security credits stop accumulating after age 70, at which point the benefit will no longer increase. This Social Security filing strategy is best suited for couples with normal to high life expectancies, who have similar earnings and plan to work until age 70 or have enough savings to provide necessary income within the deferral period.
Will I receive delayed retirement credits?
No. According to the SSA, your spousal benefits do not include delayed retirement benefits that your spouse may receive.
Can I switch from my Social Security benefit to a spousal benefit?
You can only make the switch to a spousal benefit if your spouse has not yet claimed their Social Security benefit at the time of your initial filing. According to AARP, if your spouse is already receiving Social Security when you claim your retirement benefits, you are subject to the “deemed filing” rule, which does not give you the choice to wait or switch.
This provision automatically deems you to apply for your spousal benefit, if you’re entitled to them. The SSA will not pay the sum of both you and your spouse’s benefit; rather, you will receive a monthly payment equal to the higher of the two amounts.
Social Security often represents a significant portion of post-working income, but many soon-to-be retirees and their spouses fear that Social Security benefits alone are not enough to live a full and comfortable retirement. A GoodLife reverse mortgage may be able to help improve your cash flow in retirement, allowing you to live your post-career life to the fullest. If you’re interested in learning more about the basic reverse mortgage requirements, as well as discussing the reverse mortgage application process, contact one of our helpful representatives.
At GoodLife, it’s our goal to help you comfortably live the retirement you’ve worked so hard for. We look forward to hearing from you and will be happy to explain how a reverse mortgage could complement your Social Security benefits—so you can sit back, stop working, and enjoy The GoodLife in Retirement.