If your work record doesn't produce a large Social Security benefit, but your spouse's benefit amount is much larger, Social Security spousal benefits could increase your income -- for life. However, unlike the basic Social Security retirement benefits, spousal benefits are not well understood by many people. With that in mind, here are three things about spousal benefits that you need to know.
Selena Maranjian: Not everyone is aware of it, but Social Security benefits are available to widows and widowers -- and even to some surviving children. The Social Security Administration (SSA) estimates that about 5 million widows and widowers are currently receiving monthly benefit checks based on their departed spouse's earnings history. That can be quite a big deal, because many people die without life insurance or other provisions for their families.
While we are able to start collecting our regular retirement benefits from Social Security as early as age 62, widows and widowers are able to start collecting as early as age 60 -- or 50, if they are disabled and became disabled before or within seven years of becoming widowed. The rules are even more generous for some widows or widowers. Per the SSA: "Your widow or widower who has not remarried can receive survivors benefits at any age if she or he takes care of your child who is under age 16 or is disabled and receives benefits on your record."
Surviving children, meanwhile, can collect Social Security benefits when a parent dies -- if they're younger than age 18, up to age 19, and still in elementary or secondary school, or any age if they are disabled and became disabled before age 22. The definition of children even extends to stepchildren, grandchildren, and step grandchildren, in some cases.
Matt Frankel: One thing many people don't realize is that you may be eligible to claim spousal benefits even if you're divorced. To be eligible, you need to meet the following criteria:
- The marriage lasted at least 10 years.
- You are unmarried -- if you remarried, you can only collect a benefit if your subsequent marriage has since ended.
- You are 62 or older -- this is the age of eligibility for any Social Security retirement benefit.
- Your ex-spouse is entitled to benefits based on his or her work record.
- The benefit you would get from your own work record is less than a spousal benefit would be.
You can claim spousal benefits once you turn 62, even if your ex-spouse hasn't yet applied for Social Security, as long as you have been divorced for at least two years. And you can do so even if your ex-spouse remarries -- his or her new spouse collecting a spousal benefit has no effect on your eligibility.
If you're a divorced spouse claiming a spousal benefit, your benefit (at full retirement age) is equal to half of your ex-spouse's full retirement amount. And if you're still working, the retirement earnings test still applies: If you have not reached your full retirement age and earn more than $15,720 in 2016, your spousal benefit can be temporarily reduced.
Dan Caplinger: Many people get confused about just how spousal benefits work. Once you turn 62, you're eligible to take Social Security benefits based on your spouse's work history if your spouse has also filed for benefits. Typically, your benefit will be equal to half of what your spouse would receive at full retirement age, adjusted for the age at which you take the spousal benefit. Your monthly payment will be less than half of your spouse's full retirement age benefit if you take spousal benefits early, with the maximum haircut being 30% if you claim at the first possible age of 62.
Unless you file a restricted application for spousal benefits only -- something that's now available only to those who turned 62 by the end of 2015 and have reached full retirement age -- then applying for spousal benefits will also trigger your own retirement benefits. The Social Security Administration pays out your retirement benefits first; if the spousal benefit calculation yields a higher amount, it pays the excess as a spousal benefit. For those who don't have their own work history with Social Security, the spousal benefit will be the full amount.
Knowing how spousal benefits work is important. If you do, you'll better understand all your choices for claiming Social Security.
