Social Security is critical to the financial security of millions of retirees, but it's not just retired workers who receive Social Security benefits. Spouses of retired workers may also qualify for benefits that significantly increase household income in retirement, and widows and widowers can qualify for survivors benefits.

The rules for spousal benefits are complex. For example, retired workers can increase their Social Security income by waiting until they're 70 years old to claim benefits, but that's not the case for spousal benefits. The amount of money a spouse collects in spousal benefits depends on the retired worker's earnings record and if the partner claims spousal benefits early. Here's how these benefits work so you can make the most of them. 

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The basics of Social Security

Social Security is a financial safety net meant to replace roughly 40% of the average retiree's preretirement income. After about 10 years of working at a job requiring the payment of Federal Insurance Contributions Act (FICA) taxes, most Americans qualify for at least some Social Security benefits. As of November 2018, Social Security was paying $62 billion in monthly benefits to more than 43 million retired workers. 

The specific monthly benefit doled out to each retiree is based upon the average income during their 35 highest-earning years, adjusted for inflation. This average is called a person's average indexed monthly earnings, or AIME. Once AIME is calculated, it's then reduced at certain income thresholds called bend points.

These bend points give retirees credit for a larger percentage of AIME at lower levels than at higher levels, so lower-income recipients wind up having more of their preretirement income replaced by Social Security than higher-income recipients. The percentages associated with Social Security's bend points are fixed, but the dollar amount used for each threshold can change annually because of inflation. The bend point thresholds for 2019 are shown in the following table.

% Applied to AIME up to First Bend Point

% Applied to AIME Between First and Second Bend Points

% Applied to AIME Above Second Bend Point

90%

32%

15%

Data source: Social Security Administration. AIME = average indexed monthly earnings. 

As you can see, retirees get credit for 90% of their inflation-adjusted monthly income over their 35 highest-earning years of work up to $926, 32% of their income between $926 to $5,583, and only 15% for income above $5,583 in 2019. The average retired worker in 2019 collects $1,461 per month in retirement benefits because of this formula.  

What are spousal benefits?

Spousal benefits have been a part of the Social Security program since 1939, and as of November 2018, Social Security was paying $1.8 billion in monthly benefits to over 2.4 million spouses of retired workers. The average monthly benefit paid to spouses by Social Security was $741.46 in November 2018. 

Qualification for spousal benefits is determined by past and present marital status. Generally, the person claiming spousal benefits must be currently married to the primary recipient; former spouses can receive benefits if their marriage lasted 10 years or longer, but there are some restrictions (more on that later). 

The amount a spouse receives in spousal benefits is determined by the benefit they're entitled to based on their own work record, the work record of their spouse, and the age at which the spouse begins collecting spousal benefits. 

Although the percentage of people getting married has decreased and marriages aren't lasting as long as they did in 1939, most Americans still qualify for spousal benefits because of their marriage history, even if they don't qualify for benefits on their own because of a limited or nonexistent work history.

Rules for nonworker spouses

If your spouse has already claimed their benefits and you don't have a work history that qualifies you for benefits under your own work record, you can receive spousal benefits based on your spouse's record once you reach age 62, or earlier if you're raising your spouse's child and that child is younger than 16, or disabled.

The amount of money you can receive in spousal benefits is based upon your spouse's work history and the amount they're entitled to at their full retirement age (FRA), which is the age at which they can receive 100% of their monthly Social Security benefit. For people born after 1954, full retirement age is somewhere between ages 66 and 67.

Once a spouse attains their own FRA, they're entitled to 50% of their working spouse's full retirement age benefit. If the worker's spouse begins receiving spousal benefits prior to their FRA, they'll see their benefit amount reduced by a percentage that's based on the number of months claimed early. Specifically, the spousal benefit is reduced by 25/36 of 1 percent for each month claimed prior to full retirement age up to 36 months, and by 5/12 of 1 percent if the number of months claimed early exceeds 36.

For instance, let's assume the FRA for both spouses is 66, but only one has a work history that qualifies for Social Security benefits. If the worker's monthly Social Security benefit at age 66 is $1,000, then their spouse could collect $500 per month once they turn 66, too. However, if the spouse decides to claim spousal benefits at age 62, the $500 would be reduced by 30%, resulting in a monthly benefit of $350. 

The following table shows how much a $500 spousal benefit would be reduced at age 62 by birth year.

Birth Year Full Retirement Age At Age 62, a $500 Spousal Benefit Would Be Reduced To: % Reduction
1943-1954 66 $350 30.00%
1955 66 and 2 months $345 30.83%
1956 66 and 4 months $341 31.67%
1957 66 and 6 months $337 32.50%
1958 66 and 8 months $333 33.33%
1959 66 and 10 months $329 34.17%
1960 and later 67 $325 35.00%

Data source: Social Security Administration.

The rules for spouses with dependent children under 16

Many couples are delaying having children, and divorce rates are resulting in more second marriages, so it's possible to have dependent children who qualify for benefits on your Social Security record. If those children are under age 16, it's also possible for your spouse to qualify for spousal benefits, even if they're younger than age 62. The rules in this scenario, however, are a bit different.

A spouse younger than age 62 who claims spousal benefits while caring for a child under 16 won't be subject to a reduction in spousal benefits for as long as that child is younger than 16.

However, the amount of the spousal benefit will be subject to maximum family benefit rules, which cap payments to family members on a worker's Social Security record to no more than between 150% to 180% of their FRA benefit amount. For instance, the family maximum for a person with a $1,000 full retirement benefit is between $1,500 and $1,800 per month. 

Whether the maximum is 150% or 180% depends on a complex formula involving how much the former worker's FRA benefit is. For instance, the family maximum is 150% up to a monthly full retirement benefit of $1,184 in 2019, and it increases from there. Social Security does this calculation for you, but if you're interested, here's the multipliers it uses for a workers' full retirement age benefit at specific bend points:

  • 150% of the first $1,184 of the worker's full retirement age benefit, plus
  • 272% of the worker's full retirement age benefit over $1,184 through $1,708, plus
  • 134% of the worker's full retirement age benefit over $1,708 through $2,228, plus
  • 175% of the worker's full retirement age benefit over $2,228.

If a spouse's benefits plus benefits to dependents exceed this family limit, the benefit amounts paid to them will be reduced equally among them. Like nonworker spouses, dependents and spouses can receive benefits only if the former working spouse has also claimed their benefit.

Rules for retired worker spouses

In addition to the rules for nonworker spouses regarding how spousal benefits are calculated, you should know that if you have a work history that qualifies you for Social Security on your own work record, you can't receive both your benefit and a spousal benefit. You can receive only the higher of the two amounts.

For example, if I qualify for a $2,000 full retirement age benefit on my own record and a $500 spousal benefit, I'd get only the $2,000 from my own work history, not $2,500. Alternatively, if I qualified for only $500 on my own record and $1,000 in spousal benefits, then I'd get $1,000, not $1,500.

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Rules for same-sex couples

The U.S. Supreme Court decision in Obergefell v. Hodges in 2015 held that same-sex couples "have a constitutional right to marry in all states and have their marriage recognized by other states." That decision means same-sex couples and their families can benefit from Social Security. 

In determining eligibility for Social Security benefits, including spousal benefits, the program recognizes same-sex couples' marriages in all states. It also recognizes some nonmarital legal relationships. Therefore, it's important to make sure you let Social Security know of your marital status so you can claim all the benefits you're entitled to. To find out more about Social Security for same-sex couples, you can contact Social Security directly by phone at 1-800-772-1213, or visit a local Social Security office.

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Rules for ex-spouses

It's now easier than before for ex-spouses to qualify for benefits on their former spouse's work record, thanks to new rules. As long as the person claiming spousal benefits is unmarried and at least 62, they can qualify for 50% of their ex-spouse's FRA benefit. This will not impact the ex-spouse's benefit amount, or any amounts paid to a current spouse or dependents, and it also doesn't apply to the family maximum calculation.

To collect spousal benefits based on your ex-spouse's record, the spousal benefit must exceed the benefit you'd receive based on your own work history. Unlike these other scenarios, as long as the couple has been divorced for at least two years, the spouse whose work record is being claimed on doesn't need to be receiving Social Security for the other spouse to start collecting spousal benefits. 

If you're remarried, you generally won't qualify for benefits on your ex-spouse's record, but if you become single again because of annulment or divorce or your spouse passes away, you may receive spousal benefits. 

Rules for widows and widowers and survivors benefits

Spousal benefits can be combined with a retired worker's benefit to increase household Social Security income, but a widow or widower can't collect both benefits after the worker spouse passes away. Since survivors benefits amount to 100% of the benefit paid to a retired worker prior to their death, most nonworker spouses will stop receiving spousal benefits to instead receive survivors benefits. 

One exception: The surviving spouse isn't yet at full retirement age. Surviving spouses who claim survivors benefits before turning their FRA will have their benefit reduced for each month they claim early, so in order to receive 100% of the survivors benefit, a young, surviving spouse might be better off delaying survivors benefits until they've reached full retirement age.

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What is the Social Security earnings test?

One of the most important things you need to know about spousal benefits is that if you claim them prior to reaching your FRA, you'll be subject to Social Security's earnings test. Social Security only allows recipients under FRA to earn up to a certain amount every year, and if your earnings exceed that limit, Social Security withholds some or all of your benefit.

In the years before you reach your full retirement age, it will hold back $1 for every $2 above the limit, and for the year in which you turn your FRA, the SSA holds back $1 for every $3 earned above the limit in the months leading up to your birthday. In 2019, the earnings limit for years prior to the year you attain full retirement age is $17,640, and the limit in the months leading up to your birthday in the year you turn full retirement age is $46,920. Once a recipient reaches their FRA, the earnings test no longer applies.

Spousal benefits may also be subject to income taxes. The IRS can tax up to 50% of your Social Security income if your combined income is over $25,000 (if single) or $32,000 (if married filing jointly) and up to 85% of your Social Security income if your earnings exceed $34,000 (if single) or $44,000 (if married filing jointly). (Note: Combined income = Adjusted gross income + nontaxable interest + 1/2 of your Social Security benefits.)

Other rules for Social Security

It's also important to know that pension income from work that wasn't subject to FICA taxes, such as a government job, could negatively affect your spousal benefit.

To ensure spouses don't double dip by collecting a government pension and Social Security spousal benefits designed for those with limited work histories, there's the Government Pension Offset rule. This rule reduces spousal benefits by two-thirds of the public pension amount, and because the reduction isn't limited, a big enough pension could eliminate a spousal benefit altogether.

Overall, spousal benefits provide a welcome boost for many retirees, so it's important to understand the rules associated with them before retiring to make sure you're pocketing as much money in benefits as possible.

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