Social Security benefits constitute a significant source of income for retirees, yet the amount individuals receive varies substantially because the system calculates benefits largely based on career earnings. Social Security takes into account the highest 35 years of an individual's earnings, adjusts those figures for inflation, applies a specific formula, and determines the monthly benefit accordingly.
Individuals without consistent, traditional employment histories may find this calculation disadvantageous, as their benefits might be relatively low. Fortunately, Social Security provides spousal benefits designed to assist millions, allowing eligibility for benefits connected to a spouse's earnings record.
Eligibility for Benefits Based on Spouse’s Earnings
One key advantage of spousal benefits is that a spouse can claim Social Security benefits derived from the partner’s earnings record. This provision allows the claimant to receive up to 50% of their spouse's primary insurance amount (PIA), which is the monthly benefit the spouse would receive at their full retirement age (FRA).
For illustration, a spouse with a PIA of $2,000 monthly would entitle their partner to receive up to $1,000 through spousal benefits.
To qualify for these benefits, several conditions generally apply:
- The spouse whose record is being used must be currently receiving Social Security benefits.
- The couple must have been married for at least one year, unless the claimant is the parent of the spouse’s child.
- The claimant must be at least 62 years old or be caring for a child under age 16 or a disabled child whose disability began before age 22.
Spousal Benefits for Divorced Individuals
Divorced individuals may still claim spousal benefits under certain criteria:
- The marriage lasted ten years or longer.
- The individual has not remarried.
- If the ex-spouse is eligible but has not claimed benefits, the divorced individual must have been divorced for at least two consecutive years.
Unlike current spousal benefits where the primary earner must be receiving benefits for the spouse to claim, divorced spouses may claim spousal benefits at any time after turning 62, regardless of whether the ex-spouse is currently receiving benefits.
Impact of Claiming Spousal Benefits Early
Claiming Social Security benefits before reaching full retirement age results in a reduced monthly amount, but the reduction is more pronounced for spousal benefits than for personal benefits. For example, for individuals with a full retirement age of 67 (those born in 1960 or later), the monthly reductions are as follows:
| Claiming Age | Spousal Benefit Reduction | Standard Benefit Reduction |
|---|---|---|
| 66 | 8.33% | 6.67% |
| 65 | 16.67% | 13.33% |
| 64 | 25% | 20% |
| 63 | 30% | 25% |
| 62 | 35% | 30% |
Using the example where the spouse's PIA is $2,000 (making spousal benefits up to $1,000), someone claiming spousal benefits at 64 would receive approximately $750 monthly and at 62 about $650 per month.
Limitations on Delaying Spousal Benefits
Retirees who delay claiming their own benefits past full retirement age receive delayed retirement credits, which increase monthly benefits by 2/3 of 1% per month, or an 8% annual increase. However, spousal benefits do not receive these credits.
Therefore, there is no financial advantage to delaying spousal benefits past full retirement age; FRA is essentially the latest point to file. Additionally, spousal benefits are capped at 50% of the spouse's PIA regardless of whether the spouse delays their benefits and earns a higher monthly amount due to delayed credits. For example, if the spouse's PIA improves from $2,000 to $2,200 due to delayed claiming, the spousal claimant is still eligible only for $1,000.
Conversion of Spousal Benefits to Survivor Benefits
In the event the primary earning spouse passes away, any spousal benefits currently being received convert to survivor benefits. This change allows the surviving partner to receive up to 100% of the deceased spouse’s benefit, including any delayed retirement credits accumulated by the deceased.
For instance, a surviving spouse who had been receiving a $1,000 monthly spousal benefit could see that amount increase to as much as $2,200 in survivor benefits.
Survivor benefits may begin as early as age 60, or at age 50 if the surviving spouse is disabled, provided the marriage lasted at least nine months before the death of the primary spouse.
Understanding the specific terms and conditions surrounding spousal Social Security benefits enables retired couples and individuals to make informed decisions that maximize their Social Security income. This knowledge is especially critical for those whose individual earnings histories might not yield high Social Security benefits but can leverage spousal benefits effectively.