Retired Couples Need to Understand: Crucial Facts about Spousal Social Security Benefits
Many elderly individuals currently rely on Social Security to meet their retirement expenditures. Some individuals qualify for Social Security due to their lengthy employment and contribution history to the program. For those who never worked or whose earnings were relatively low, the spousal benefits offered by Social Security can be instrumental.
Irrespective of your marital status in retirement, Social Security spousal benefits might significantly influence your financial situation. Here are some crucial facts to remember about them:
1. Your spousal benefit cannot increase
Your spousal Social Security benefit has a maximum value, which is 50% of your current or ex-spouse's benefit at their full retirement age. If you claim your spousal benefit before reaching full retirement age, it will be reduced--just like claiming Social Security early based on your own earnings record reduces your lifetime monthly benefit.
However, there's a notable difference between claiming Social Security on your earnings record and claiming a spousal benefit. The former allows you to boost your monthly benefit if you delay your claim beyond full retirement age. But when it comes to spousal benefits, delaying your claim won't increase your monthly payouts.
You'll never exceed 50% of your spouse's benefit at full retirement age, regardless of when you file your claim. So, don't postpone your claim with the expectation of boosting your monthly checks.
2. You can't receive two payments at once
Social Security spousal benefits can be indispensable if you never worked and thus do not qualify for personal benefits. Even if you have an earnings record that entitles you to Social Security, you can still claim spousal benefits if they would result in a higher monthly check.
One thing you cannot do, however, is receive two payments simultaneously. Social Security will pay the higher of the two amounts--either your benefit or your spousal benefit.
If you are entitled to $1,200 per month based on your work history and also eligible for a $1,500 monthly spousal benefit, you will receive the $1,500 from Social Security--but not the total of $2,700.
3. Your ex-spouse cannot prevent you from filing on their record
Divorces can range from amicable to contentious. Regardless of the outcome of your marriage, if you're entitled to Social Security spousal benefits based on your ex's record (which generally applies if you were married for at least 10 years and haven't remarried since), they cannot veto your claim or decide when you can file.
The Social Security benefits you receive based on your ex-spouse's record will not impact the amount of benefits they receive in retirement. If your ex has remarried, it will also not affect their current spouse's benefits.
If you've been divorced for at least two years, you can claim spousal benefits on your ex-spouse's record once you're eligible. You are not obliged to wait until your ex starts receiving Social Security themselves.
The earliest age you can claim spousal benefits is 62. But if you don't wait until your full retirement age, your spousal benefit will be reduced.
Understanding the nuances of Social Security's spousal benefits can help you better plan for retirement. Keep these points in mind to ensure you can enroll at the appropriate time and estimate your expected income.
In certain financial situations, the maximum spousal Social Security benefit of 50% of your current or ex-spouse's benefit at their full retirement age could significantly impact your retirement savings. If you have an earnings record that entitles you to Social Security but your spousal benefit would result in a higher monthly check, you can still claim the spousal benefits, but you cannot receive both payments simultaneously; Social Security will pay the higher of the two amounts.
