Social Security income is an essential portion of most retirement plans, but spousal benefits don't get enough attention. Many people don't even realize that they can claim retirement income based on their spouse's earnings, and these cash flows can be significant for households where people are no longer in the workforce. It's a good idea to check out your eligibility for this program on the Social Security Administration's website, and you should consider these three key points before applying.
1. You can receive up to half of your spouse's full retirement benefit
Spousal benefits can be significant, and eligible recipients can claim up to half of the amount of their spouse's full retirement benefit. The average monthly Social Security income is $1,884 for someone at full retirement age (FRA) right now, so many retiree households could be eligible for more than $900 of additional monthly benefits. That spousal benefit number is nearly $2,000 per month for families entitled to the maximum benefit with a full retirement age of 67. Financial planners often recommend replacing roughly 80% of your pre-retirement income to maintain your lifestyle, so this extra income can cover a meaningful gap for many families.
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To be eligible for spousal benefits, you must be at least 62 years old and have been married for at least one year. The program also applies to ex-spouses who have not remarried. The age requirement can be waived for people with a qualifying disability or a dependent child. You also cannot claim spousal benefits unless your spouse has elected to receive Social Security retirement benefits. That's especially relevant to households with a primary earner who plans to delay retirement and Social Security income.
2. Spousal benefits aren't stackable
Spousal benefits aren't intended to increase dramatically the Social Security income of people who have their own work histories. In most cases, the amount of the calculated spousal benefit is reduced by the amount you would receive in your own retirement benefits. If you apply for spousal benefits, you are "deemed" to have applied for your own, preventing people from exploiting any sort of timing loophole.
What that means is that you can't "stack" spousal benefits on top of your own Social Security income and get two checks. Moreover, you can't elect to receive spousal benefits at age 62, then later take your own higher benefits at FRA.
Simply put -- if you're already entitled to significant retirement income from Social Security, don't expect to get much more from spousal benefits.
3. Your age affects the amount you can receive
Spousal benefits function similarly to retirement benefits in that you can take payments before your full retirement age, but that results in lower income each month. In the case of spousal benefits, that reduction can be as much as 35%. They are based on the primary insurance amount at the spouse's full retirement age. If you're 62 years old and your partner receives Social Security income, you can get a larger spousal benefit by waiting until your own FRA to claim.
There's a key difference to consider between spousal and regular benefits. Social Security retirement benefits continue to rise between FRA and age 70, so you can claim more than your primary insurance amount from your own personal benefit. There's no such upside available with spousal benefits, so there's no extra incentive to delay income beyond FRA.
It's important to think about the effect of age on benefits, especially for couples with a relatively large age gap. The primary earner could maximize their income by delaying till age 70, but the spouse might still face a discounted payout if they're under 67. You'll need to weigh the effect of cumulative, earlier income against having bigger monthly checks in the future.
