Social Security is a key source of income for many retirees, and understanding how to maximize spousal benefits can significantly boost retirement income for married couples.
With careful planning and strategy, couples can ensure they’re making the most of the Social Security system.
In this article, we’ll explore how Social Security spousal benefits work and the best strategies for maximizing them.
How Social Security Spousal Benefits Work
Social Security spousal benefits were established in 1939 to provide financial support to spouses, initially aimed at women who did not work outside the home.
Today, these benefits allow spouses to receive a portion of their partner’s Social Security if they don’t qualify for enough benefits based on their own earnings.
To be eligible for spousal benefits:
- You must be at least 62 years old.
- Your spouse must have filed for their own Social Security benefits.
- The maximum spousal benefit is 50% of your spouse’s full retirement age (FRA) benefit, which is typically 66 or 67, depending on your birth year.
If you claim spousal benefits before your FRA, the amount you receive will be reduced. For instance, if you claim at age 62, you may receive as little as 32.5% of your spouse’s benefit.
Strategies for Maximizing Spousal Benefits
1. Delay Claiming Benefits
The most effective way to maximize both retirement and spousal benefits is to delay filing until after full retirement age. For every year you delay after your FRA, your benefits grow by 8% annually, up until age 70.
While spousal benefits do not increase after the FRA, the working spouse’s benefits do, which can indirectly benefit the couple.
If both spouses delay, they can take advantage of the maximum benefit increases. This strategy is especially helpful for higher earners who can significantly boost their retirement benefits and leave a larger survivor benefit for their spouse.
2. Higher-Earning Spouse Delays Benefits
If one spouse has a significantly higher earning history, it may make sense for that spouse to delay claiming benefits until age 70.
The lower-earning spouse can begin claiming their Social Security at full retirement age, and once the higher-earning spouse turns 70 and claims their benefits, the lower-earning spouse can switch to spousal benefits if it results in a higher payout.
This “split strategy” ensures that the couple can receive some income earlier while still allowing the higher earner’s benefit—and by extension, the spousal benefit—to grow to the maximum amount.
3. Avoid Early Filing
Claiming benefits as early as age 62 will reduce both your own and spousal benefits. While claiming early might be tempting, particularly if you need the income, the long-term reduction in monthly payments can be significant.
Waiting until full retirement age ensures that you or your spouse receives the full 50% of the working spouse’s benefit.
4. Coordinating Benefits for Divorced Spouses
Divorced spouses may also be eligible for spousal benefits if the marriage lasted 10 years or more and the divorced spouse is unmarried.
In this case, the same rules apply: the spousal benefit will be 50% of the former spouse’s benefit if claimed at FRA, but it will be reduced if claimed earlier.
Importantly, claiming spousal benefits as a divorced spouse does not reduce the benefits available to the ex-spouse or their current spouse.
5. Plan for Survivor Benefits
One important aspect of spousal benefits is survivor benefits. If one spouse dies, the surviving spouse can receive 100% of the deceased spouse’s benefit if they have reached full retirement age.
Delaying benefits can increase the survivor benefit, leaving the surviving spouse with more income.
If the higher-earning spouse delays claiming until age 70, they will maximize not only their own benefit but also the survivor benefit their spouse will receive if they pass away first.
How to Claim Spousal Benefits
There are three ways to apply for spousal benefits:
- Online at the Social Security Administration (SSA) website if you are within three months of turning 62.
- By phone by calling 1-800-772-1213.
- In person at your local Social Security office.
When applying, you’ll need to provide several documents, including:
- Your birth certificate.
- Your marriage certificate.
- Proof of citizenship or legal residency.
- Your spouse’s Social Security number.
If you qualify for both retirement and spousal benefits, the SSA will automatically give you the higher of the two amounts.
When to Claim Spousal Benefits
The best time to claim spousal benefits depends on your specific financial situation and retirement goals.
Couples with sufficient savings may want to delay claiming to maximize benefits, while others may prefer to claim earlier to meet immediate income needs.
Remember that once you file for spousal benefits, you are also deemed to be filing for your own retirement benefits. This means you cannot allow your own benefits to grow while claiming spousal benefits.
The SSA will always pay out the higher of the two amounts, so it’s essential to consider this when planning your claim.
Maximizing Social Security spousal benefits requires careful planning and coordination. By delaying benefits, utilizing split strategies, and avoiding early filing, couples can significantly increase their retirement income.
It’s always a good idea to consult with a financial advisor who can model various scenarios and help determine the best strategy for your situation.
FAQs
When should my spouse and I claim Social Security benefits?
Delaying until age 70 maximizes benefits, but it depends on your financial needs.
Can I receive both my own and spousal benefits?
No, the SSA will pay whichever benefit is higher.
How much is the maximum spousal benefit?
50% of your spouse’s benefit if you wait until full retirement age.
Can a divorced spouse claim spousal benefits?
Yes, if the marriage lasted 10 years and the divorced spouse is unmarried.
Do spousal benefits increase after full retirement age?
No, spousal benefits max out at full retirement age, but your own benefits continue to grow until age 70.
