Your career earnings largely determine your monthly Social Security benefit amount. The more you earn, the more you pay in Social Security payroll taxes (up to a certain amount), and the larger your monthly benefits will be (again, up to a certain amount).
The issue with this process is that not everyone has a sufficient work history. Some people are stay-at-home parents; some people work low-paying jobs; and some people have gaps in employment for one reason or another. Any of these situations could noticeably affect how much someone could receive in benefits.
Luckily, Social Security offers spousal benefits, which are a way for someone to claim Social Security based on their spouse's work history. They're not the best route for everyone, but can be extremely helpful in the right situation. Let's take a look at who's eligible to receive them.
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Who is eligible to receive Social Security spousal benefits?
The two non-negotiable factors to qualify for Social Security spousal benefits are:
- having been married for at least one year, and
- the qualifying spouse currently receiving retirement benefits.
From there, one of the following must also apply:
- You're at least 62 years old.
- You're caring for a child under age 16.
- You're caring for a child with a disability that began before age 22.
To qualify, one of the three criteria above must be met. Even if you meet the one-year marriage requirement and your spouse is collecting benefits, you won't be eligible without one of the other three.
How your claiming age affects spousal benefits
When you claim spousal benefits, you're eligible to receive up to 50% of your partner's primary insurance amount (PIA), which is the monthly amount someone is eligible to receive if they claim benefits at their full retirement age (FRA). However, as with standard benefits, when you claim spousal benefits affects how much you can receive.
Here are FRAs by birth year:
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Claiming spousal benefits before your FRA reduces them by 25/36 of 1% monthly, for up to 36 months. After 36 months, every additional month further reduces them by 5/12 of 1%. These reductions are greater than the reductions for claiming standard benefits early.
To see this in action, let's assume your partner's PIA is $2,000. This means if you claim spousal benefits at your FRA, you would be eligible to receive $1,000. If your FRA is 67 and you claim at 64, your benefit would be reduced to $750 (25% reduction); if you claim at 62, it would be reduced to $650 (35% reduction).
It's worth noting that, unlike standard benefits, monthly spousal benefits aren't increased by delaying them past your FRA. So, if you're claiming spousal benefits, your FRA is realistically the latest you should claim.
Who should claim spousal benefits?
Just because you're eligible for spousal benefits doesn't mean they're the best choice for you.
If you're considering spousal benefits, the first thing I'd recommend is logging into (or creating) your own account on the Social Security Administration (SSA) website. The SSA provides an earnings record, and gives estimated monthly benefit amounts based on the earnings it has on file.
If your partner is currently receiving benefits, I would compare the estimated amount to their PIA. If the estimated amount is more than 50% of your partner's PIA, then spousal benefits may not make sense for you: You'd receive more by claiming your own benefits, and you'd have the option to delay benefits, increasing the monthly amount.
If your partner is not currently receiving benefits, I'd follow the same steps and compare the estimated amounts.
