A recent Social Security survey from MassMutual found that nearly 3 in 10 adults nearing retirement incorrectly disagreed with the following statement: "If I have a spouse, he or she can receive benefits from my record even if he or she has no individual earnings."
Spouses can indeed claim Social Security benefits based on the work record of their retired partner, but spousal benefits differ from retired-worker benefits in a few important ways. Here are four things married couples should know in 2024.
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1. Spousal Social Security benefits depend on the spouse's claiming age and the retired worker's lifetime income
A spouse that claims Social Security on the work record of their retired partner can receive a benefit equal to 50% of that partner's primary insurance amount (PIA). The PIA refers to the benefit a retired worker can receive when they claim Social Security at their full retirement age (FRA), and it is calculated based on their lifetime income.
In other words, the benefit paid to a spouse depends on the lifetime income of the retired worker on whose record they claim Social Security. However, the spouse's claiming age is also considered when spousal benefits are calculated. Specifically, spouses are eligible for benefits at age 62, but spouses that claim Social Security before their FRA get a smaller payout, meaning they get less than 50% of their retired partner's PIA.
The precise reduction depends on exactly how early the spouse claims Social Security. The chart below shows the spousal benefit (as a percentage of the retired worker's PIA) for anyone born in 1960 or later, meaning their FRA is 67.
|
Age |
Spousal Social Security Benefit |
|---|---|
|
62 |
32.5% |
|
63 |
35% |
|
64 |
37.5% |
|
65 |
41.67% |
|
66 |
45.84% |
|
67 |
50% |
Data source: Social Security Administration. Note: The spousal Social Security benefit amounts are shown as a percentage of the retired worker's primary insurance amount (PIA), and they apply to individuals born in 1960 or later.
2. Spousal benefits do not increase if the spouse claims Social Security after full retirement age
One important distinction between spousal benefits and retired-worker benefits is that spouses cannot earn delayed retirement credits. That means a spouse would not get a bigger payout if they started Social Security after their FRA.
Conversely, retired workers that claim Social Security after their FRA earn delayed retirement credits that increase their benefit by two-thirds of 1% per month, or 8% per year. Those credits stop accumulating at age 70. That means retired workers can maximize their payout by delaying Social Security until age 70.
Since spousal benefits do not work the same way, there is no direct advantage to claiming any later than FRA. Instead, spouses can maximize their payout by starting Social Security at their FRA.
3. Spouses are only eligible for spousal benefits if their retired partner is receiving Social Security
To review, spouses are eligible for Social Security benefits at age 62, and they are entitled to their full spousal benefit (50% of their retired partner's PIA) when they reach their FRA. But there is an important limitation to those rules. Spouses cannot claim Social Security on the work record of their retired partner unless their partner is already receiving retirement benefits.
That can lead to difficult decisions in a few situations. For instance, the retired worker may want to delay Social Security until age 70 to maximize their benefit, but doing so may prevent the spouse from claiming at their FRA. In that scenario, the spouse would not be able to claim Social Security until their partner claimed at age 70 (more on this below).
Similarly, if a spouse's partner suspends their retired-worker benefit to earn delayed retirement credits, the Social Security benefit paid to the spouse would also be suspended.
4. Spouses receive whichever is larger, the spousal benefit or their own-retired worker benefit
Though at least one person in the couple must be receiving benefits for spousal benefits to come into play, the other partner may also be eligible for Social Security benefits based on their own work record. In that scenario, the spouse will automatically receive whichever benefit is larger when they file for Social Security.
As a caveat, spouses cannot claim spousal benefits while simultaneously waiting for their own retired-worker benefit to rack up delayed retirement credits. Spouses that apply for Social Security automatically apply for both benefit types, and they receive the larger of the two payouts.
