A Social Security check may only have your name on it, but if you're married, the decisions you make about when to sign up can affect your spouse, as well. The same goes for any dependents claiming benefits on your work record. Here's a look at three ways that your Social Security moves affect your spouse's benefit and what you can do to maximize both.
What are spousal Social Security benefits?
Before we dive into the particulars of how your Social Security decisions affect your partner, it helps to have a basic understanding of spousal Social Security benefits.
Generally, you can claim Social Security benefits on your own work record if you've worked long enough to earn 40 credits. One credit is defined as $1,510 in earnings in 2022, and you can earn a maximum of four credits per year.
But if you're married, you also have the option of claiming a spousal benefit. This will be up to half of your partner's benefit at their full retirement age (FRA). For most workers today, FRA is somewhere between 66 and 67.
You only get to claim one benefit, and the Social Security Administration automatically gives you the larger of your own benefit or your spousal benefit. But the one that's bigger depends, in part, on the moves each person makes.
1. Your income during your working years affects their spousal benefit
Your Social Security benefit is based on your average monthly income over your 35 highest-earning years, adjusted for inflation. So anything you do today to increase your income will also boost your Social Security checks later, unless you earn over $147,000 this year. That's the maximum income subject to Social Security taxes, so earning more won't boost your benefit any further.
For most people, that's not an issue. And applying for a new job, asking for a raise, or starting a side hustle are all valid ways to try to increase your future Social Security benefit. And they'll boost the spousal benefit available to your partner, as well.
2. Your income affects their cost-of-living adjustments too
Almost every year, Social Security recipients receive a cost-of-living adjustment (COLA) that boosts their checks. How much of a difference this makes depends on what the year's COLA is and the size of your checks.
In 2022, Social Security beneficiaries got a 5.9% COLA. That means if you had a $1,600 benefit in 2021, you'd now get $1,694 per month in 2022. But COLAs don't just affect you. Your spouse will also see their checks grow since their benefit is based on yours.
If they qualified for an $800 spousal benefit in 2021, they'd get $847 per month in 2022 -- $47 more per month. That's not bad, but if their spousal benefit was higher, the COLA would have an even bigger effect.
Say you worked hard and boosted your income during your working years so you qualified for an $1,800 monthly benefit at your FRA. That means your spouse would now be eligible for a $900 spousal benefit at their FRA. And a 5.9% COLA on a $900 benefit would be worth an extra $53 per month. That's $6 more than in our previous example.
3. Your spouse can't claim a spousal benefit until you sign up
Another thing worth noting is that your spouse can't claim a spousal benefit until you sign up for Social Security. But they can still claim Social Security on their own work record if they qualify.
If you know your spouse will get more from a spousal benefit than they will from their own work record, it might be smart to have them sign up for benefits before you do. They can claim as much as they can on their own work record, and their benefits can help you delay until you're ready to sign up. Then, when you apply, the Social Security Administration will automatically switch your partner to a spousal benefit.
But every couple is unique. That's why it's important to sit down with your spouse and talk about when each of you plans to retire and claim Social Security so you can coordinate your efforts. Create a my Social Security account if you haven't already to see how much you'll get from the program based on your work history to date, and use this as your guide when thinking about the ideal time for each of you to start claiming benefits.