To qualify for Social Security benefits in retirement, you need to accrue 40 work credits in your lifetime. Credits are earned by making money and paying Social Security taxes on your income.
But it's also possible to collect Social Security as a retiree even if you never worked thanks to spousal benefits. There tends to be a lot of confusion, however, about how these benefits work, so here are a few key things you ought to know.
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1. You can't claim a spousal benefit on top of a personal benefit
It may be that both you and your spouse worked for many years and are each entitled to a monthly benefit from Social Security in retirement. Having your own earnings history doesn't mean that spousal benefits are off the table. But you should also know that you can't double dip as far Social Security is concerned.
What this means is that you're able to collect a single monthly benefit from Social Security -- either your own benefit or a spousal benefit. (Once your spouse passes, you may be eligible for survivors benefits.) And you should also know that Social Security will pay you the higher of the two.
So let's say that based on your earnings record, you're entitled to $1,500 a month from Social Security. It may be that your spouse is eligible for a monthly benefit of $3,200. In that case, your spousal benefit would amount to $1,600 as long as you wait until full retirement age (FRA) to sign up for it. But you can't collect your $1,500 a month plus a $1,600 monthly spousal benefit -- you'll only get the $1,600.
2. You can't claim a spousal benefit until your spouse files if you're married
You're allowed to sign up for Social Security benefits based on your own earnings record at any point once you turn 62. However, if you're claiming spousal benefits and are still married, you'll need to wait for your spouse to file before you can sign up for spousal benefits.
It may be that your spouse is hoping to delay their Social Security filing beyond FRA to score a higher monthly benefit. For each year you delay your own claim past FRA until age 70, your monthly benefit grows 8%.
But if that's the case, your spouse might make it so that you have to hold off on collecting Social Security yourself if you're not eligible for benefits based on your own wage history. That said, if you're divorced, you may not have to wait for your ex-spouse to file for Social Security to get spousal benefits depending on how long ago your marriage ended.
3. You can't grow a spousal benefit by delaying your Social Security filing
We just learned that delaying Social Security benefits beyond FRA results in a boost. But that only applies to a benefit you're claiming based on your own work record.
You can't grow a spousal benefit beyond 50% of what your current or former spouse is entitled to. So once you reach FRA, there's no sense in delaying your spousal benefit claim.
The fact that Social Security pays spousal benefits could end up being a boon to your household in retirement. But make sure you know the rules so you're able to take advantage of this aspect of the program.
