Spousal Social Security Benefits: 3 Things All Retired Couples Should Know

One of the best social programs the U.S. offers is Social Security. For millions of Americans, Social Security benefits make up a lot of their income in retirement and act as a financial safety net. Social Security retirement benefits are well-earned, too. After years of paying Social Security taxes, it’s a way for people to benefit on the back end of their careers.

Generally, Social Security determines someone’s monthly Social Security benefit using a formula that considers the 35 years when their earnings were the highest. However, that’s not the only way for someone to receive Social Security retirement benefits. You can also claim benefits based on a spouse’s earnings record.

For couples considering Social Security spousal benefits, here are three things you should know.

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1. How Social Security spousal benefits are calculated

For someone to qualify for spousal benefits, they must have been married for at least a year, and they or their spouse must be at least 62 years old or caring for a child who is under 16 or disabled who receives benefits on their record.

Social Security spousal benefits are based on the primary claiming spouse’s primary insurance amount. It serves as the baseline. If the person claiming spousal benefits is at full retirement age, they can receive up to 50% of their spouse’s primary insurance amount.

For example, if spouse A is the primary claimer and their monthly benefit at their full retirement age is $1,500, spouse B (the person claiming spousal benefits) is eligible to receive up to $750 in monthly benefits. The exact amount will depend on the age at which spouse B claims benefits.

2. The role of your full retirement age

Your full retirement age is among the most important numbers in Social Security (and retirement in general). It’s based on your birth year as follows:

Chart showing Social Security full retirement ages by birth year.

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Full retirement age plays a key role because monthly benefits are adjusted based on when you claim relative to it.

For the primary claiming spouse (Spouse A in our example), benefits are reduced by 5/9 of 1% each month before their full retirement age, up to 36 months. Each month after that, benefits are further reduced by 5/12 of 1%, with the earliest claiming age being 62. For example, if their full retirement age is 67 and they claim benefits at 62, their primary insurance amount is reduced by 30%.

For those receiving spousal benefits, benefits are reduced by 25/36 of 1% each month before their full retirement age, up to 36 months. Any additional month reduces benefits by 5/12 of 1%. In this case, someone whose full retirement age is 67 and claims spousal benefits at 62 would have their monthly benefit reduced by 35%.

It’s important to note that benefits typically increase if you delay them past your full retirement age, but this doesn’t apply to spousal benefits.

3. The link between Social Security spousal and survivors benefits

If someone is claiming spousal benefits when their partner passes away, Social Security will convert their spousal benefits to survivors benefits. Survivors benefits allow you to receive up to 100% of your deceased spouse’s benefit, including the increased amount they may have received by delaying benefits past their full retirement age.

A widow or widower can begin receiving survivors benefits at age 60 (50 if they have a disability), but the same reduction rules apply if the benefits are claimed before full retirement age. For instance, someone claiming survivors benefits at age 60 would only receive 71.5% of their late spouse’s benefit.

You can’t receive spousal and survivors benefits at the same time, only whichever is higher. However, since spousal benefits are only up to 50% of the primary claiming spouse’s benefit, survivors benefits are typically the higher-paying option.

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Spousal Social Security Benefits: 3 Things All Retired Couples Should Know was originally published by The Motley Fool