Married couples may find that knowing these rules results in a higher benefit than expected.
Over the past 90 years, Social Security has helped millions of Americans maintain financial stability in retirement. It’s one of the country’s most effective social programs, despite all its nuances and moving parts. One way to deal with all the moving parts is to focus on the areas that are relevant to you and your situation.
For married couples, this could mean being aware of the specific rules that may affect how and when each spouse should claim benefits. If you’re married and approaching retirement, here are five things about Social Security worth knowing in case they apply to your situation.
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1. You don’t need a work history to claim benefits
Generally speaking, your Social Security benefit is tied to your lifetime earnings and how much you’ve paid in Social Security payroll taxes. The problem with that, however, is that not every American has a long or consistent work history, so they’d only be eligible for a minimal Social Security benefit.
Thankfully, for married couples, not everyone needs a work history to be eligible for Social Security benefits. Social Security offers spousal benefits, which allow someone to claim benefits based on their partner’s work history. By claiming spousal benefits, you’re eligible to receive up to 50% of your partner’s primary insurance amount (the monthly benefit they receive by claiming at their full retirement age).
To qualify for spousal benefits, you must be 62 years old (or any age if you have a child who is younger than 16 in your care or has a disability) and married for a year, and your spouse must currently be receiving benefits.
2. Divorcees can claim spousal benefits
Although they’re called spousal benefits, you don’t need to currently be married to be eligible to claim them. If you were married to someone for at least 10 years but got a divorce, you’re still able to claim spousal benefits.
To be eligible, you must currently be unmarried (remarrying will automatically end the spousal benefits). If your spouse remarries, you’re still eligible to claim benefits, as long as you’re at least 62 years old.
3. Claiming spousal benefits early will also reduce monthly benefits
Claiming standard benefits before your full retirement age will permanently reduce the monthly amount you receive. The same applies to spousal benefits, but the difference is in how much the benefits are reduced. Claiming spousal benefits early results in a larger deduction than claiming standard benefits early.
Claiming standard benefits early will reduce your monthly benefit by 5/9 of 1% monthly, up to 36 months. With spousal benefits, they’re reduced by 25/36th of 1% monthly for the first 36 months. Each additional month after 36 further reduces standard and spousal benefits by 5/12 of 1% monthly.
Assuming your full retirement age is 67 (which applies to anyone born in 1960 or later), here is how the reductions differ between standard and spousal benefits:
| Claiming Age | Standard Benefit Reduction | Spousal Benefit Reduction |
|---|---|---|
| 62 | 30% | 35% |
| 63 | 25% | 30% |
| 64 | 20% | 25% |
| 65 | 13.3% | 16.7% |
| 66 | 6.7% | 8.3% |
Data source: Social Security Administration.
To see it in action, let’s assume your spouse’s primary insurance amount was $2,000, making you eligible to receive $1,000 (if you claim at your full retirement age). If you claimed spousal benefits at 62, you’d only be eligible to receive $650. If you claimed at 64, you’d only be eligible to receive $750.
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4. There is no benefit in delaying claiming spousal benefits
With standard benefits, if you delay claiming them beyond your full retirement age, you’ll receive an increased monthly benefit. Benefits are increased by 2/3 of 1% monthly, or 8% annually, until you reach age 70.
Unfortunately, you won’t receive an increase in your monthly benefit if you delay claiming spousal benefits past your full retirement age. This means your full retirement age should realistically be the latest you claim spousal benefits if that’s the route you’re going to take.
5. Spousal benefits are converted to survivor benefits when a spouse dies
If your spouse passes away while you’re receiving spousal benefits, your benefits are generally converted to survivor benefits, which makes you eligible to receive between 71.5% to 100% of your deceased spouse’s benefits. To qualify for survivor benefits, you must meet the following three criteria:
- Be at least 60 years old (50 to 59 if you have disability).
- Had been married for at least nine months before your spouse’s death.
- Didn’t remarry before age 60 (50 if you have a disability).
Since spousal benefits are only up to 50% of your spouse’s benefits, the conversion to survivor benefits results in an increased benefit.