Trying to get the Social Security benefits you're entitled to can be far more complex than you realize, especially when you're trying to navigate the rules associated with spousal benefits. To try to make those rules less confusing, we asked three Motley Fool contributors to help us better understand how spousal benefits work and to offer up their tips on how best to receive them.
One thing that trips up many of those who want to claim Social Security benefits based on their spouse's work history is that you can't receive those spousal benefits unless your spouse has filed for regular retirement benefits. This poses a problem if your spouse wants to wait to apply for Social Security and rack up delayed-retirement credits in order to maximize their eventual benefit.
However, there's a way around this issue once your spouse reaches full retirement age. At that point, your spouse is allowed to file for benefits but immediately suspend them. Because your spouse has technically filed for Social Security, you're allowed to claim your spousal benefits. But because your spouse has suspended receiving money from Social Security, the amount that your spouse will receive later on will reflect delayed-retirement credits, allowing your spouse's monthly payments to be as much as 32% higher than they would have been at full retirement age.
Finally, there's an exception to this rule for divorced spouses. If you were married for at least 10 years and want to claim spousal benefits based on your ex-spouse's work history, you can do so even if your ex-spouse hasn't filed. So long as your ex is eligible for benefits, you can claim for spousal benefits if you meet all the requirements for divorced spouses.
One aspect of Social Security that's often misunderstood is what happens to the benefits of a spouse who passes away. Naturally, the Social Security payments for the deceased person stop. After that, the surviving spouse receives the greater of two choices: either a Social Security benefit based on their own earnings (if they're eligible for them) or a percentage of the Social Security income the deceased spouse had been receiving.
There are many special rules that apply. For example, in most cases, you aren't eligible if you weren't married to the deceased spouse for at least nine months. If you remarry before age 60, you can't receive benefits as a surviving spouse. If you are remarried after that, your survivors benefits won't be affected.
Here's another secret for you. If you don't remarry, chances are your ex is worth more to you dead than alive. Once an ex-spouse who is receiving Social Security benefits dies, you'll be treated as a widow or widower. If you're at least 60, you'll be able to collect a portion of your late ex's benefit and let your own benefit grow unclaimed until you reach 70. At that point, you can claim the larger of either your retirement benefit or your widow(er)'s benefit.
If your ex has remarried, it will have no effect on the benefits you can claim. But there are other factors to take into account. You can only receive 100% of your deceased spouse's benefits if you are at or above full retirement age. If you're between the ages of 60 and full retirement age, you're eligible for between 71.5% and 99%. If you're younger than that, you can still get some benefits if you are caring for a child of your ex-spouse who is younger than age 16.
One final gotcha. Be sure to apply for survivors benefits promptly, because in some cases, benefits are paid from the time you apply, not from the time your spouse or ex-spouse died.
Another important fact about Social Security spousal benefits that many people don't realize is that while you can maximize your monthly Social Security payments by waiting until age 70 to claim them, there's no advantage to waiting past your full retirement age for Social Security spousal benefits.
Spousal benefits top out at 50% of your spouse's primary insurance amount. As with regular Social Security benefits, this amount decreases if you claim before your full retirement age. For instance, the earliest you can claim is age 62. If you claim at 62 under Social Security spousal benefits, you can get only 32.5% of your spouse's primary insurance amount. With each year you wait, the amount rises by roughly 3% to 4% per year until your full retirement age, at which point you're entitled to 50% of your spouse's primary insurance amount.
While regular Social Security benefits rise 8% each year you delay them past your full retirement age until hitting a maximum of 132% of your primary insurance amount, Social Security spousal benefits do not rise after your full retirement age. So if you wait to claim Social Security spousal benefits past your full retirement age, you're missing out on money that could be yours.