There's good news for many married Americans during their retirement years. You could potentially receive higher Social Security benefits by using your spouse's earnings history rather than your own.
It's important to understand the details, though. Plan to claim Social Security spousal benefits? Here's why you absolutely shouldn't wait past age 67.
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How Social Security spousal benefits work
You can receive up to 50% of your spouse's Social Security retirement benefit at the full retirement age (FRA). This is a big plus for anyone who wasn't in the workforce for very long or who didn't make nearly as much money as his or her spouse.
The primary requirement for collecting spousal benefits is that your higher-earning spouse must have already filed for retirement benefits. When your spouse retires matters -- up to a point, anyway.
If your spouse claims Social Security benefits early, it will reduce benefits for both of you with one exception. If you're providing care for a child who is under age 16 and receives Social Security disability benefits (referred to as a "qualifying child"), your spousal benefits won't be reduced if your spouse collects retirement benefits before his or her FRA.
When you collect spousal benefits can also be important. If you begin receiving the benefits before your FRA, your benefits will be reduced. Again, there's an exception to this for spouses who care for a qualifying child.
Why you probably shouldn't wait past age 67
Your higher-earning spouse will receive a greater retirement benefit by waiting past his or her FRA to file. The Social Security Administration (SSA) increases the benefit by 8% per year for up to three years for anyone who holds off claiming retirement benefits.
Your spouse holding off will not increase your benefits, though. Spousal benefits pay a maximum of 50% of the higher-earning spouse's benefits at his or her FRA.
It's also important to know that you won't boost your spousal benefit by waiting past your FRA to file. Since the maximum FRA right now is 67, this means that you probably shouldn't wait past then to claim spousal benefits. However, note that I included the word "probably" in this statement.
There is one scenario where waiting past your FRA makes sense: If holding off on filing boosts your retirement benefits based on your own earnings history enough to make it higher than 50% of your spouse's benefit at his or her FRA. The key thing to understand is that while the delayed retirement credit doesn't apply to spousal benefits, it does apply to retirement benefits based on your earnings.
Different benefits, different rules
Note that we've been talking about spousal benefits and not survivors benefits. Different rules apply for these different benefits. Survivors benefits are for when your spouse has died.
Unlike spousal benefits, survivor benefits will be higher if your spouse waited until after his or her FRA to claim retirement benefits. Your survivor benefits will be reduced if you begin collecting them before your FRA. However, the survivor benefits won't increase as a result of you waiting past your FRA to file.
What if you already receive spousal benefits when your spouse dies? Your benefit will automatically switch to survivors benefits once SSA receives the report of your spouse's death.
