Social Security and Your Spouse
Social Security will provide benefits to your spouse if you are receiving the retirement benefit. This is regardless of whether your spouse has worked or not. In some cases, even ex-spouses can claim. To qualify, your spouse must be at least 62 years old. Additionally, you need to apply for the Social Security benefit first.
Who is Eligible for the Spousal Benefit
If you have already filed to receive the Social Security benefit, your spouse may be eligible to receive an amount up to half of your benefit. This does not come out of your benefit. For working couples both partners will be eligible to receive the Social Security retirement benefit. Either partner may receive the spousal benefit, depending on which is the greater amount: half the other's Social Security benefit, or their own retirement benefit. If only one partner has worked for a sufficient time to get the retirement benefit, the other is still able to get the spousal benefit.
Your spouse may qualify for spousal benefits if:
- You have been married to your current spouse for a minimum of one year.
- You are receiving the Social Security retirement benefit.
- Your spouse is at least 62 years old (or taking care of a child: who is 16 or younger or on disability benefits).
To be eligible as an ex-spouse the following additional requirements must be met:
- You must have been married for at least 10 years.
- You must have been divorced from your spouse for at least two consecutive years.
- You must be entitled to Social Security retirement or disability benefits.
- The benefit amount your ex-spouse would receive based on their work record would be less than the spousal benefit amount available.
When to Apply for the Spousal Benefit
A spouse can claim spousal benefits from age 62 (or any age if they are caring for an eligible child). If your spouse files for the Social Security benefit before their full retirement age (FRA), they automatically apply for the spousal benefit if they have a Social Security retirement benefit. As mentioned above, the claim they get will be the higher of the retirement or spousal benefit. Your spouse can also apply for just the spousal benefit if they are not eligible for the retirement benefit.
The full retirement age ranges from 66 to 67. The FRA is 66 if you were born between 1943 and 1954. It then rises by a few months if you were born from 1955 to 1959. The FRA is 67 if you were born in 1960 or later.
If your spouse chooses to apply for the spousal benefit after reaching 62, but before the full retirement age, their benefits will be permanently reduced, so they will not be entitled to the full 50% of your benefit. If your spouse waits until they have reached their full retirement age, then their spousal benefit will be 50% of your retirement benefit. Unlike the retirement benefit, if they wait until after the age of 70, spousal benefits will not increase.
We have previously discussed the advantages of waiting until after FRA to claim your retirement benefit as you may increase your Social Security benefits. It is important to note however that spousal benefits are limited to half of the partner's benefit at FRA and so do not increase further.
Conversely, if you retire before the full retirement age, your spouse's benefit will most likely be reduced. Because your retirement benefit will be permanently reduced the spousal benefit is also less. The spousal benefit could be as little as 32.5% instead of up to 50% of your FRA benefit. If you die and your spouse has not remarried, they are likely to receive the full amount from your benefit instead of just a partial sum. If a spouse is caring for a child who is under the age of 16 or disabled, the benefit is also not reduced.
Further Considerations for the Spousal Benefit
- Spouses can take their own benefit early and then switch to their partner’s benefit later. A woman's benefit is often less than half of her husband's, and women can have particular retirement savings considerations. This is especially the case if she has not worked when looking after children, and in general, has earned a lower wage. As a result, the wife may be better off claiming early and then switching to the spousal benefit later if her husband intends to claim at a later age. However, there is a catch - if filing early for their own retirement (under the FRA) they will not be entitled to the full 50% later under the spousal benefit.
- If your spouse was born before Jan 2, 1954, your spouse can receive the spousal benefit and delay receiving their own retirement benefits until later. Unfortunately, if your spouse was born after this date then this option is no longer available.
- If you die, your widow can still receive ‘survivor benefits’ (unless they remarry). This is generally 100% of your retirement benefit.
- The spousal benefit, like the retirement benefit, is reduced if they are working at the same time and have not reached the full retirement age. How much the benefit is reduced depends on the retirement earnings received.
- Your spouse will also be able to apply at age 65 for Medicare health coverage.
There is much to consider in maximizing your Social Security benefits and working out what is best for you and your spouse. You should both take into account health and lifestyle and even if you both want to keep working. Before making a decision, it is best to have as much information as you can, and a fee-only financial advisor can help.