Understanding Social Security Spousal Benefits
Millions of Americans rely on social security as a significant portion of their retirement income. But, there’s a catch—some people don’t have enough work history to receive the benefits they might need. This could stem from various reasons like sporadic job opportunities or taking time off to raise kids. As a result, some individuals find themselves with very limited or no Social Security benefits.
However, there is a silver lining. You can access Social Security benefits without relying solely on your earnings. This comes in the form of the spousal allowance. Essentially, Social Security spousal benefits let you claim benefits based on your spouse’s income history. If you’re nearing retirement and think this sounds like a good option, here are a few key points to keep in mind.
1. Who qualifies for Social Security spousal benefits?
You can start claiming spousal benefits as early as 62. The only exception to this age rule is if you care for a disabled child or a child under 16, allowing you to claim benefits at any age. To qualify, your spouse must have already claimed their benefits, and you need to have been married for at least a year. Even if you are divorced but were married for a minimum of 10 years and are currently single, you can still claim spousal benefits.
If you meet these requirements, you could receive up to 50% of your spouse’s premiums. This is referred to as the Primary Insurance Amount (PIA), which is a monthly benefit derived from applying for these benefits. At specific full retirement ages (FRA), for instance, if your PIA is $2,400, you may be eligible for up to $1,200.
2. The benefit amount will fluctuate based on when you apply for spousal allowance.
Similar to standard benefits, if you choose to claim spousal benefits before reaching FRA, expect a reduction in your monthly benefit based on how far you are from that age. Just to clarify, the reduction is different compared to the primary claiming spouse: they lose 5/9 of 1% for the first 36 months and 5/12 of 1% for each additional month afterward. For you, claiming spousal benefits early results in a greater reduction, especially in the first 36 months.
For example, a full retirement age of 67 and claiming benefits at 64 means your benefits will drop by about 25%. On the other hand, claiming spousal benefits at 64 leads to a reduction of around 30%. Then, if you delay to age 62, the reductions increase to 30% for standard benefits and 35% for spousal benefits.
Another thing to consider is that your spousal benefit won’t increase if you wait to claim past your FRA. That should ideally be the latest age for claiming.
3. What happens to spousal benefits if the primary claiming spouse passes away?
If you have been receiving spousal benefits and your spouse dies, those benefits convert to survivor benefits. Unlike spousal benefits, a survivor benefit allows you to receive up to 100% of your deceased spouse’s benefits, including any delays they may have accrued before passing.
For example, if your late spouse’s PIA was $2,400 but you waited two years to claim, you’d receive the full amount of $2,784 instead of being capped at $1,200 for spousal benefits.
Widows can access survivor benefits as early as age 60, or age 50 if disabled, provided they were married for a minimum of nine months before their spouse’s death. Additionally, if you were married for at least 10 years before divorcing, you might also be eligible for survivor benefits.
It’s important to note that you can’t receive both spousal and survivor benefits simultaneously. This conversion works out well since spousal benefits max out at 50%. Like standard and spousal benefits, if survivor benefits are claimed before reaching FRA, there will be deductions from your monthly amount.
