Approximately 85% of older Americans depend on Social Security in retirement, according to a report from the Society of Actuaries, with nearly two-thirds of those retirees saying their monthly checks are a major source of income.
Whether you expect Social Security to play a significant role in your retirement or not, it's a good idea to ensure you're maximizing your monthly checks. And if you're currently either married or divorced, you could collect more than you think.
How your marital status can affect your benefits
In general, your Social Security benefit amount is based on your work record and your earnings throughout your career. However, you may also be entitled to spousal or divorce benefits, whether you're receiving benefits based on your own work record or not.
To collect spousal benefits, you'll need to be married to someone who is entitled to retirement benefits. With divorce benefits, your ex-spouse must be eligible to receive benefits, and your marriage must have lasted for at least 10 years. In addition, you cannot currently be married in order to collect divorce benefits.
How much you can receive in spousal or divorce benefits depends on a few factors, but the maximum you can collect is 50% of the amount your spouse or ex-spouse is eligible to receive at his or her full retirement age (FRA).
The average retiree receives $1,514 per month in benefits, according to the Social Security Administration. If your spouse or ex-spouse is entitled to collect that amount at his or her FRA, you can receive up to half of that, or $757 per month, in spousal or divorced spousal benefits.
Factors that can impact how much you receive
You can potentially receive hundreds of dollars per month in spousal or divorce benefits, but there are a few factors that will affect just how much you receive, such as your work history and the age you begin claiming.
If you're entitled to Social Security benefits based on your own work record, you may still be able to collect spousal or divorce benefits. However, you will only receive the higher of the two amounts. So, for instance, if your spouse is collecting $2,000 per month in benefits at his or her FRA and you're eligible to receive $800 per month at your FRA based on your work record, you would receive $1,000 per month in spousal benefits, not $1,800 per month.
In addition, in order to receive as much as possible, you'll need to wait until your FRA to begin claiming. If you claim before that age, your benefit amount will be reduced. Waiting beyond your FRA also won't result in bigger checks if you're collecting spousal or divorce benefits, so there's no financial incentive to delay benefits past your FRA.
Finally, although your spouse or ex-spouse may choose to delay claiming benefits to earn bigger checks for themselves, that won't affect how much you receive in spousal or divorce benefits. If your spouse or ex-spouse waits until after his or her FRA to file for benefits, the most you can collect is still 50% of his or her FRA benefit amount.
How to tell if you're eligible for extra money in benefits
The Social Security Administration typically doesn't notify those who qualify for these types of benefits, and you'll need to apply for them if you're eligible. For that reason, it's important to determine whether or not you're able to collect spousal or divorce benefits, or else you could miss out on extra cash each month.
If you meet the criteria for spousal or divorce benefits, consider how your benefit amount measures up to that of your spouse or ex-spouse. If you're receiving considerably less (or if you're not entitled to benefits at all based on your work record), you may qualify for spousal or divorce benefits.
Social Security benefits are a significant source of income for many older Americans, so it pays to ensure you're collecting as much as possible. By taking advantage of spousal or divorce benefits, you could potentially boost your checks by hundreds of dollars per month.