Social Security benefits can go a long way in retirement, especially if your savings are falling short. The median retirement account balance among U.S. adults is only around $27,000, according to Vanguard's "How America Saves 2023" report. Without a robust nest egg, many retirees will find themselves relying heavily on their benefits just to make ends meet.
It's critical, then, to ensure you're squeezing every penny out of Social Security. While there are various strategies for increasing your benefits, there's a simple one that could boost your payments by nearly $900 per month: taking advantage of spousal or divorce benefits.
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What are spousal and divorce benefits?
Spousal and divorce benefits are a special type of Social Security offered to those who are currently or previously married to someone entitled to retirement or disability benefits. To qualify for spousal benefits, you simply need to be married to someone who's eligible for Social Security. Even if you've never worked or haven't worked long enough to receive your own benefits, you can still collect spousal benefits.
Divorce benefits come with a few more requirements. Your previous marriage must have lasted for at least 10 years, and you can't currently be married. If you've been divorced for fewer than two consecutive years, you'll also need to wait until your ex-spouse begins claiming Social Security before you can file for divorce benefits.
How much can you receive?
As of July 2023, the average benefit amount among spouses of retired workers is around $891 per month, according to the Social Security Administration. Spouses of disabled workers receive, on average, around $407 per month.
How much you will actually receive, though, will depend mostly on your spouse's or ex-spouse's work record.
For both spousal and divorce benefits, the maximum you can collect is 50% of the amount your spouse (or ex-spouse) is entitled to at their full retirement age (FRA). To receive this amount, you'll also need to wait until your own FRA to file.
Everyone born in 1960 or later has an FRA of 67 years old. If you file before that age (as early as 62), your benefit will be reduced by up to 30%.
What if you're also entitled to your own Social Security?
You can still collect spousal or divorce benefits even if you're also eligible for Social Security, based on your own work record. However, there are restrictions on how much you can receive.
In all cases, the maximum you can collect is still 50% of your spouse's or ex-spouse's benefit at FRA. If you're already earning more than that, based on your own record, you don't qualify for spousal or divorce benefits. If you're earning less than that, you'll receive the higher of the two amounts.
For example, say you can receive $800 per month in retirement benefits at your FRA based on your own earnings, and your spouse will collect $2,000 per month at their FRA. In this case, your spousal benefit would be $1,000 per month, so that's how much you'll receive -- not $1,800 per month.
Social Security is complex and confusing at times, but it can also be a lifeline in retirement. By taking full advantage of all the types of benefits you're entitled to, you could potentially boost your monthly income by hundreds of dollars per month.
