Millions of seniors depend on Social Security to pay the bills in retirement, and those benefits are a function of lifetime earnings. Specifically, your 35 highest years of income are indexed to determine what amount you'll be entitled to collect each month as a senior.
You'll often hear that if you didn't work a full 35 years, you'll have a big fat $0 factored into your benefits calculation, thereby dragging down that number. That's why parents who take time off from their careers to raise children, for example, often end up getting hurt from a benefits perspective.
But what happens if you never actually end up working at all? What if you spend your life being a caregiver to family members, or spend your days volunteering and never actually have a paid career? Does that mean you're out of luck on the Social Security front?
Thankfully, there's a way you can collect benefits from Social Security even without an earnings record of your own. It's called spousal benefits, and it's a provision that's helped numerous seniors stay afloat financially even when they never actually worked.
Spousal benefits can save your retirement
If you never worked but are married to someone who's entitled to Social Security based on his or her work record, you can collect spousal benefits that equal up to 50% of your husband or wife's benefits at full retirement age (which, depending on year of birth, is 66, 67, or somewhere in between). The only catch is that your spouse must be collecting benefits for you to receive benefits as well. Or, you and your spouse can apply for benefits at the same time.
Now if you're entitled to spousal benefits and file for them before reaching your own full retirement age, those benefits will be reduced, as would benefits collected based on your own earnings record. Furthermore, whereas delaying benefits and boosting them simultaneously is an option when you're claiming them based on your own record, delayed retirement credits don't apply to spousal benefits. As such, you won't boost your spousal benefits by filing after your own full retirement age.
Another thing to keep in mind is that if you do have a work record of your own, but earned substantially less than your spouse, you might still end up getting spousal benefits. Social Security will pay you the greater of your own monthly benefit or 50% of your spouse's benefit. So let's say your spouse is entitled to $1,600 a month in Social Security based on his or her work record, and you're entitled to $750 a month based your own work record. The Social Security Administration will automatically bump up your benefit to $800, which is half of what your spouse is eligible to collect.
Divorcees can collect spousal benefits, too
It's not just seniors who are still married who get to collect Social Security spousal benefits. If you're divorced, but your marriage lasted 10 years or longer and you're currently unmarried, you'll remain eligible for 50% of whatever your ex-spouse is entitled to collect. Furthermore, if you and your ex-spouse have been divorced for less than two years, you'll need to wait until he or she files for benefits to get access to your spousal benefits. If you've been divorced for more than two years, however, you can claim your spousal benefits once you turn 62, since that's the earliest age to file for Social Security. At that point, it won't matter whether your ex-spouse has started collecting his or her benefits or not.
So there you have it: Even if you never actually worked, you might still have some retirement income to look forward to from Social Security. And that's something that should ease your mind going into your golden years.