Social Security is a cornerstone for many Americans' retirement plans. Nearly six in 10 retirees say it's a major source of income, according to a Gallup poll from April. So, ensuring you maximize your benefits is essential.
Spousal Social Security benefits take an already complicated decision and add a whole new level of calculus on top of it. Understanding the basics of how spousal benefits work can go a long way toward making the most of what's available to you.
Here are three important details all retired couples should know.
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1. You can receive spousal benefits without any work history of your own
While you need to work for at least 10 years to qualify for a Social Security benefit on your own earnings record, that's not the case for claiming spousal benefits. When you claim Social Security based on your spouse's earnings record, there's no requirement for you to have worked at all.
As long as you're married to someone who qualifies for benefits on their own earnings record for at least one year, you can receive a spousal benefit. That can be a great help for immigrants who had limited opportunities to work in the U.S., or for parents who became homemakers relatively early in life, giving up career opportunities.
If you do qualify for benefits with a limited work history of your own, you may still be able to receive a higher benefit by claiming on your spouse's record. That's where claiming decisions start to get complicated.
2. You'll max out your spousal benefit at full retirement age
Unlike Social Security benefits based on your own earnings record, spousal benefits do not earn delayed retirement credits. That's the boost you'll receive in your monthly check by delaying your Social Security application beyond your full retirement age.
As such, anyone planning to claim spousal benefits will likely want to claim Social Security when they reach full retirement age. That's age 66 for anyone born in 1954 or earlier, but it increases by two months for each year after that until reaching age 67 for people born in 1960 or later.
The maximum benefit you can receive as a spouse is 50% of your spouse's primary insurance amount (PIA), the amount your partner will receive at their full retirement age. But if you claim early, the Social Security Administration will reduce your benefit. The following table shows how someone with a full retirement age of 67 will see their spousal benefit reduced by claiming early.
| Claiming Age | Percentage of Spouse's PIA |
|---|---|
| 62 | 32.5% |
| 63 | 35% |
| 64 | 37.5% |
| 65 | 41.67% |
| 66 | 45.83% |
| 67 | 50% |
Data source: Social Security Administration.
There's one more hiccup that could throw you for a loop. You can't claim your spousal benefits unless your spouse is receiving their own retirement benefit. That could leave some spouses with a reduced (or no) retirement benefit based on their own work history while they wait for their spouse to reach their retirement age.
3. You could receive a bump in benefits if your spouse passes away before you
Your spousal benefits technically end if your spouse passes away before you. However, you typically then become immediately eligible for a potentially larger benefit based on what your spouse was receiving before they passed away. That's called a survivor's benefit.
Since survivor benefits are based on the amount a person received before their passing, it means if they delay until age 70, it can provide a bigger benefit for the spouse later. Note, however, if the surviving spouse claims their survivor benefit before their full survivor's retirement age, it'll reduce the survivor's benefit. The good news is, unlike with regular spousal benefits, you can claim your own benefit without claiming your survivor benefit, which makes it easy to wait until you're eligible for the full amount.
As such, it behooves the higher earner from a couple to wait until they've maxed out their benefit to ensure a bigger benefit for their spouse, in case they pass away early. But that also means a spouse may need to wait even longer to receive regular spousal benefits, especially if there's a significant age gap between the couple.
Survivor benefits are an important consideration for long-term retirement planning, and you shouldn't simply look to maximize your spousal benefits by claiming earlier than you have to. Most couples will do well with a simple strategy where the low-earning spouse claims at full retirement age while the high-earning spouse claims at age 70. That may mean giving up some benefits in the short term for the insurance of survivor benefits.
That said, everyone's situation is different, and you may want to consult a professional financial planner to help with your unique situation.
