4 Things You May Not Be Aware Of When It Comes to Social Security Spousal Benefits

The majority of taxpayers are aware of Social Security’s retirement benefits. However, one of the program’s most significant perks, the spouse benefit, is not as well-known.

The spousal benefit gives qualified spouses lifetime retirement benefits, even if they never worked a day. As with any government program, however, there are several restrictions and regulations that you must follow to maximize your advantage.

Here are some of the more salient features of the Social Security spousal benefit that you may not be aware of.

Your Spouse’s Benefits May Be Greater Than Your Own

If you hold a part-time job or have significant gaps in your working history, you may believe you will not be eligible for many Social Security benefits when you retire. However, if you are married, you may receive more than you anticipated.

If you wait until full retirement age, which is 67 for those born in 1960 or later, to register for spousal benefits, your Social Security payment will be the greater of your qualifying benefit or 50% of your spouse’s benefit.

For instance, if your spouse is entitled to a monthly Social Security benefit of $3,000, you can receive a monthly payment of $1,500 after reaching full retirement age.

Given that most employees’ average Social Security benefit was $1,555 in mid-2021, it is completely feasible that your spouse’s benefit may exceed your benefit.

If your spouse files for benefits prematurely, your payout will be reduced.

The amount of Social Security benefits a recipient receives is determined by their employment history and filing date. Although the full retirement age for most workers has increased to 67, you can submit a claim to begin receiving benefits as early as age 62.

On the other hand, your advantages will be reduced by 30%. In other words, if your monthly full retirement benefit is $2,000 at age 67, filing at age 62 reduces your monthly benefit to only $1,400.

The amount of a spouse’s Social Security payment is directly related to the amount received by the primary recipient.

As a result, if your spouse claims benefits at 62, your spousal payment will be permanently decreased. Rather than earning 50% of your spouse’s $2,000 monthly full retirement age payment, you would receive $700, or 50% of your spouse’s reduced $1,400 monthly payout.

Also check: Newsom’s plan to reduce the gas tax: $400 debit cards and no tax increase

Spouses Will Not Earn a Greater Benefit by Delaying Filing Until Age 70

Just as employees face decreased Social Security retirement benefits if they file early — for example, at age 62 — those who file late will have their benefits grow.

If you were born in 1943 or after, each year you wait to claim your benefits results in an increase of 8% in the amount paid, up to the age of 70.

It equates to a payout of 132 percent of your full retirement age benefit at age 70. In other words, if your monthly benefit were set at $2,000 at age 67, it would increase to $2,640 at age 70.

On the other hand, spouses cannot partake in this benefit since their payment is limited to 50% of the primary beneficiary’s full retirement benefit.

In other words, even if your spouse delayed collecting the $2,640 monthly benefit until age 70, your maximum benefit would remain 50% of $2,000, or $1,000 per month.

Even If You Are Divorced, You May Qualify For Benefits

Even people aware of the spousal benefit provided by Social Security may believe that divorce eliminates that possibility. While this is frequently the case, if you were married for at least ten years before your divorce and have not remarried, you retain your previous Social Security spousal benefit.

In other words, if you are divorced and have been married for at least ten years and have not remarried, you can claim a pension equal to 50% of your ex-benefit spouse’s at full retirement age.

However, as with any worker requesting Social Security retirement benefits, your payout will be reduced if you claim before reaching full retirement age.