Spousal benefits can benefit people with varying incomes.
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Millions of Americans rely on Social Security for most or all of their retirement income. Unfortunately, not everyone has enough career income to qualify for valuable benefits. Whether it’s due to inconsistent work, staying home to raise children, or any other reason, this can mean receiving little or no Social Security benefits.
The good news is that there is another way to receive Social Security benefits without using your own earnings record: spousal benefits. Social Security spousal benefits allow you to claim Social Security benefits based on your partner’s income record. If you’re approaching or approaching retirement and think this option is right for you, here are three things you need to know.
1. Who is eligible to receive Social Security spousal benefits?
The earliest age you can claim spousal benefit is age 62 (same as standard benefit), the only exception being if you support a disabled child or a child under 16. In the latter case, spousal benefits can be claimed at any age.
Two other criteria are that your spouse has already claimed benefits and that you have been married for at least a year. If you are divorced and have been married for at least 10 years, you can also claim spousal benefits if you are currently unmarried (even if your ex-spouse has remarried).
If you check these three boxes, you will be eligible to receive up to 50% of your spouse’s primary insurance amount (PIA). This is a monthly benefit that you receive by claiming benefits at your spouse’s Full Retirement Age (FRA). For example, if your PIA is $2,400, you may be eligible to receive up to $1,200. Below is the FRA by year of birth.
2. The amount you receive will vary depending on when you request spousal allowance.
Similar to standard benefits, if you claim spousal benefits before joining FRA, your monthly benefit will be deducted based on your distance from FRA. The difference between the two is how much the benefit is reduced. For the primary claiming spouse, claiming benefits before FRA will result in a reduction of 5/9 of 1% per month for the first 36 months. For each additional month thereafter, your benefit will be reduced by 5/12 of 1%.
The earlier you claim your spousal benefit, the greater the reduction. For the first 36 months, your benefit will be reduced by 25/36 of 1% each month. For each subsequent month, the discount rate decreases to 5/12 of 1% per month.
In this case, if your FRA is 67 and you claim standard benefits at age 64, your benefits will be reduced by 25%. If you claim spousal benefit at age 64, your spousal benefit will be reduced by 30%. If you claim a standard benefit or spousal benefit at age 62, your benefit will be reduced by 30% and 35% respectively.
Another notable difference between standard and spousal benefits is that your monthly spousal benefit will not increase if you delay claiming beyond your FRA. So realistically that should be the latest thing you claim.
3. Spousal benefits are converted in the event of the death of the primary claiming spouse.
If you are claiming spousal benefits and your partner dies, Social Security converts the spousal benefits to survivor benefits. Unlike a spousal benefit, a survivor benefit allows you to receive up to 100% of your deceased spouse’s benefits, including any delayed retirement benefits they earned before their death.
For example, if your spouse’s PIA was $2,400 per month, but you delayed benefits for two years and received $2,784, you would receive the full $2,784 instead of the maximum $1,200 you are eligible for in spousal benefits.
Widows are eligible to receive survivor benefits at age 60, or age 50 if they are disabled, if they were married at least nine months before the death of the primary claiming spouse. If you were married for at least 10 years and then divorced, you may be eligible to receive survivor benefits.
Since you cannot receive both spousal benefits and survivor benefits, this benefit conversion works in your favor since spousal benefits are capped at 50%. However, like standard benefits and spousal benefits, if you claim survivor benefits before FRA, your monthly benefits will be deducted.
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