When planning for retirement, many married couples overlook an important benefit available to them: Spousal Social Security Benefits. These benefits can significantly increase the household’s retirement income, especially if one spouse has a limited or no work history. However, understanding how these benefits work and how to maximize them is essential for a successful retirement plan. In this article, we’ll explore three critical things every married couple should know about Spousal Social Security Benefits.
1. Eligibility for Spousal Benefits
To qualify for spousal benefits, you must meet specific criteria outlined by the Social Security Administration (SSA). Here’s what you need to know:
- Age Requirement: You must be at least 62 years old to begin receiving spousal benefits. However, keep in mind that claiming before your Full Retirement Age (FRA) will reduce the benefit amount.
- Marriage Duration: You must have been married for at least one year. If you’re divorced, you can still qualify for spousal benefits as long as your marriage lasted at least 10 years and you’re not remarried.
- Spouse’s Eligibility: Your spouse must have filed for their own Social Security retirement benefits. If your spouse has not yet claimed their benefits, you cannot receive spousal benefits until they do.
Even if you have not worked or have limited work history, you may be eligible to receive a benefit based on your spouse’s earnings record, which can be a great advantage for non-working spouses.
2. How Much Will You Receive and When Should You Claim?
The amount you’ll receive as a spousal benefit is based on your spouse’s earnings history. The maximum spousal benefit is 50% of your spouse’s Primary Insurance Amount (PIA), which is the amount they would receive at Full Retirement Age (FRA).
- Claiming Early: If you start receiving benefits at age 62 (the earliest possible age), you’ll only receive about 32.5% of your spouse’s PIA. This is a permanent reduction in your monthly benefit.
- Claiming at Full Retirement Age: If you wait until your FRA to claim, you’ll receive the full 50% of your spouse’s PIA. Delaying past your FRA does not increase your benefit beyond this 50%.
- Delayed Claiming: If you choose to delay claiming past FRA, you will not increase your spousal benefit. However, delaying your own Social Security retirement benefits until age 70 will increase those benefits, which could make it beneficial to delay both spouses’ claims if possible.
The key takeaway here is that waiting until your FRA to claim spousal benefits can ensure you receive the maximum possible amount.
3. Strategies to Maximize Your Spousal Benefits
Couples can use specific strategies to maximize their total Social Security income. Here are a few options to consider:
- Delayed Retirement: If both spouses delay their retirement benefits until age 70, they will both receive their maximum benefit amounts. This can significantly boost the household’s overall Social Security income.
- Claiming Own Benefits First: If one spouse has a higher benefit, the lower-earning spouse might claim their own benefit first and switch to the spousal benefit later, if it’s higher. This strategy requires careful planning, so it’s important to understand the implications of switching between your own benefits and spousal benefits.
- Coordinated Timing: By carefully planning the timing of when each spouse files for benefits, couples can increase their overall Social Security lifetime benefits. In some cases, it may make sense for one spouse to file for benefits early, while the other delays, depending on the couple’s financial situation.
Understanding these strategies and working with a financial advisor can help you make informed decisions to ensure you’re receiving the most out of Social Security benefits.
Additional Considerations for Divorced Spouses
Divorced individuals may still be eligible for spousal benefits based on their ex-spouse’s earnings record if they were married for at least 10 years. To qualify, the divorced individual must also be at least 62 years old, not currently married, and the ex-spouse must have filed for Social Security benefits. In this case, the divorced individual does not need to notify their ex-spouse of their claim, and they can receive the benefits even if the ex-spouse is remarried.
Conclusion
Spousal Social Security benefits are a valuable resource for married couples, providing an opportunity for increased retirement income. By understanding the eligibility criteria, benefit amounts, and strategies for maximizing these benefits, couples can make more informed decisions and optimize their Social Security benefits. If you’re unsure about how to apply or which strategy to pursue, it’s always a good idea to consult with a financial advisor or visit the Social Security Administration’s website for more detailed information.
