Social Security benefits can go a long way in retirement, and if you're married, you could be entitled to extra cash each month in the form of spousal benefits. Spousal benefits are typically available to the lower earner in a marriage, and spouses can earn up to 50% of their partner's full benefit amount each month.
One lesser-known aspect of this type of benefit, however, is that your benefit amount could change years into retirement if your situation changes. In some cases, you could even be disqualified from benefits altogether. Here's what you need to know.
Image source: Getty Images.
How to tell whether you qualify for spousal benefits
The primary requirement to receive spousal benefits is that you must be married to someone eligible for either retirement or disability benefits. You generally must be at least 62 years old to file unless you're caring for a child who is either under age 16 or disabled and qualifies for benefits on your spouse's record.
Again, the maximum amount you can receive is half of your spouse's full benefit amount -- or the amount they'll earn by filing at their full retirement age. You'll also need to wait to file until your own full retirement age to receive your full spousal benefit, as claiming early will result in a reduced payment.
If you're also entitled to retirement benefits based on your work history, you can sometimes still receive spousal benefits. However, your spousal benefit must be higher than your retirement benefit, and you'll receive only the higher of the two amounts -- not both.
For example, say you're earning $800 per month in retirement benefits, while your spouse qualifies for $2,000 per month at their full retirement age. Your maximum spousal benefit in this case is $1,000 per month. The Social Security Administration will pay out your $800 monthly retirement benefit first, then you'll receive an additional $200 per month in spousal benefits so that your total payment is $1,000 per month.
If you were receiving, say, $1,200 per month in retirement benefits, you wouldn't qualify for spousal benefits at all in this situation because that's higher than your maximum spousal benefit.
What happens to your benefit if your marital status changes?
Spousal benefits aren't the only type of Social Security based on your marital status, and if you marry, divorce, or are widowed during retirement, it could affect your benefit amount.
Divorce benefits are similar to spousal benefits, except that you must not be married to qualify. Your previous marriage also must have lasted for at least 10 years, and your ex-spouse has to be eligible for Social Security benefits.
In some cases, getting divorced could change your benefit or disqualify you entirely. For example, say you're currently receiving spousal benefits, but you and your spouse divorce after nine years of marriage. Once you're no longer married, you won't qualify for spousal benefits. But because you were married for less than 10 years, you also can't collect divorce benefits.
If you remarry after getting divorced, that could also affect your payments. Say, for example, your ex-spouse is receiving $3,000 per month in retirement benefits, leaving you with a $1,500 monthly divorce benefit. If your new spouse is collecting $2,000 per month from Social Security, your new spousal benefit would drop to $1,000 per month.
Similarly, say you were previously receiving divorce benefits, but after remarrying, your current partner is not eligible for Social Security. You'll not only lose your divorce benefits in this case, but you also won't qualify for spousal benefits.
What if your spouse passes away?
If your spouse passes away in retirement, you'll no longer qualify for spousal benefits. Instead, though, you could collect survivors benefits.
Survivors benefits are not just for widow(er)s, as they're sometimes also available to dependent children, divorced spouses, and other family members who relied financially on the deceased person. Most commonly, though, they are reserved for spouses.
The amount you receive will depend on your relationship to the deceased person and the age at which you file, but spouses can collect up to 100% of the person's benefit amount. To qualify, you and your spouse must have been married for at least nine months prior to their death, and you cannot have remarried prior to age 60.
Spousal benefits can be a lifeline for many married couples in retirement, but they can also be confusing at times. By understanding exactly who qualifies, how much you might receive, and how your marital status affects the size of your checks, it will be easier to plan for your financial future.
