One of the most powerful benefits Social Security offers is extended benefits to spouses. Spousal benefits can provide essential income to a married couple throughout retirement, and critical income to a surviving spouse after one spouse passes away.
If you’re married, you and your spouse should factor in Social Security spousal benefits as part of your financial plan for retirement. Work with a financial advisor to help each spouse make a filing decision that can maximize your potential benefits.
Find a financial advisor or planner who specializes in Social Security decisions.
The Basics on Spousal Benefits
Even if a spouse has never worked or doesn’t have enough Social Security credits to qualify for their own benefits, they may still receive payments from Social Security as a spouse on their married partner’s record.
A husband or wife can receive up to one-half of their spouse’s primary insurance amount (PIA) at their full retirement age (FRA). For one spouse to qualify for spousal benefits, the other spouse must be receiving or at least eligible for their own Social Security benefit. (That includes both retirement or disability benefits.)
A spouse can claim spousal benefits as early as age 62. However, the amount of the spousal benefit would be permanently reduced. The reduction is based on the number of months until the spouse claiming spousal benefits reaches full retirement age.
Spousal benefits vs. Work Benefits
What if both spouses have enough credits on their Social Security accounts to qualify for benefits on their own?
In this case, your Social Security benefits based on your work record are paid first. If the spousal benefit you are eligible for is higher than your own work benefit, your Social Security payment would be increased to bring the total benefit up to the higher spousal benefit.
Otherwise, you would opt to file for your the higher Social Security benefit based on your work record.
Most spouses no longer have the choice between taking their own benefit or their spousal benefit. Nor can they switch from their spousal benefit to their work-credit benefit, after delaying filing to increase their monthly payment. This provision is in effect for people born in 1953 and earlier, but it’s eliminated for those born after 1954.
Critical Support for Surviving Spouses
Financial support for surviving spouses is a critical component of the Social Security program. For a widow or widower, these benefits can be the difference between maintaining their preferred lifestyle in retirement or falling into poverty during their later years.
A surviving spouse can receive the full amount of their deceased spouse’s Social Security benefit if the surviving spouse is at or over their own full retirement age. If the surviving spouse has not yet reached their FRA but is at least over 60 (or over 50 if disabled), he or she can receive a reduced survivor’s benefit.
A surviving spouse may choose between taking their own benefit and their survivor’s benefit, but they cannot claim both. It would make sense for a surviving spouse to select the higher benefit they would be eligible for. However, they may choose to take their survivor’s benefit first and delay their own filing up to age 70 in order to increase their individual benefit. Then, the surviving spouse may switch to the higher payment.
Similarly, a surviving spouse who is over age 62 but not at their FRA may delay their own benefit until FRA or longer while claiming survivor’s benefits. This can help a surviving spouse collect some income prior to full retirement age and give them the opportunity to increase their individual benefit, either until they reach their FRA or even longer up to age 70.
Survivor’s benefits do not increase after full retirement age. The most a surviving spouse can receive is 100 percent of their deceased spouse’s primary insurance amount. So there’s no reason to delay taking survivor’s benefits, if a surviving spouse is eligible to claim them.
Social Security Planning for Two
Each spouse in a marriage has their own Social Security filing decision to make. Whatever choice you make, it’s important to recognize what impact it may have on your spouse’s financial future.
For married couples, the ultimate goal in Social Security planning is to ensure one spouse will have enough income to maintain their lifestyle after the other spouse passes away.
It can be a complicated decision with all the different rules in play. That’s why it makes sense to meet with a financial advisor who’s skilled in Social Security planning.
An advisor can guide to a decision that’s suitable for your overall financial situation and your retirement income plan. Find a Social Security advisor in your area.