Spousal benefits can be a lifeline in retirement, but it’s important to know how they work.
The great thing about being married in retirement is having someone to share that period of life with. It can be lonely and isolating to go from working full-time to not having a job or the structure that goes with it. Having a life partner to help occupy your free time and support you during that transition is crucial.
Being married could also work to your advantage when it comes to Social Security. If you’re entitled to a monthly benefit of your own, based on your personal earnings history, you can coordinate with your spouse to establish a savvy filing strategy. And if you’re not entitled to Social Security because you never worked or you didn’t work enough, you may be eligible for a spousal benefit by virtue of being married.
Even if you’re divorced, you may be eligible for spousal benefits from Social Security if your ex is entitled to benefits of their own. But either way, it’s important to know how spousal benefits work. Here are some rules to keep in mind.
1. There’s no point in delaying spousal benefits
If you’re claiming Social Security on your own earnings record, you’re entitled to your full monthly benefit at full retirement age, or FRA, which is 67 for anyone born in 1960 or later. You can also boost your benefit by 8% a year by delaying your filing past FRA. This incentive runs out once you turn 70.
But there’s no such thing as a delayed spousal benefit. If you’re claiming a spousal benefit, you may as well sign up once you reach FRA. Filing for a spousal benefit at age 70 will leave you with the same monthly payday you’d get by filing at FRA.
2. You can’t claim a spousal benefit when married until your partner files for Social Security
If you’re divorced, you don’t necessarily need to wait for your ex-spouse to claim Social Security to file for spousal benefits on their record. But if you’re married, you can’t sign up for spousal benefits until your spouse claims Social Security.
That’s why it’s important to sync up on that decision. Your spouse may want to delay their filing to snag a higher monthly benefit. By doing so, however, your spouse might prevent you from claiming benefits when you want to.
3. You can’t collect a spousal benefit on top of your own
It may be the case that you worked for many years and are entitled to Social Security based on your own earnings. But if your spouse was a much higher earner, claiming spousal benefits could leave you with a higher monthly paycheck.
As long as you wait until your own FRA to claim a spousal benefit, you’ll get 50% of what your spouse is collecting. Social Security will pay you the higher of either your personal benefit or 50% of your spouse’s benefit. But it won’t pay both.
In other words, let’s say that based on your earnings history, you’re eligible for $1,300 a month from Social Security. If your spouse’s monthly benefit amounts to $3,000, you’re better off with a spousal benefit, which, in this case, is worth $1,500. But in that case, you’d only get $1,500 a month from Social Security — not $2,800.
Spousal benefits are something you may be eager to claim. Just make sure you’re clear on the rules before moving forward.
