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Social Security - Spousal Benefits

Spousal benefits allow you to receive benefits on the earnings record of your spouse. To receive spousal benefits, one does not need to be fully covered (40 credits). Only one spouse can claim spousal benefits. The amount of your spousal benefit depends on how old you are when you collect it. A spousal benefit is worth up to 50% of the worker's primary insurance amount (PIA) if collected at the spouse’s full retirement age; less if collected earlier. Spousal benefits are available as early as 62. But just like retirement benefits, collecting spousal benefits before your full retirement age includes a reduction in payments. For instance, a spouse who is 62 years-old will receive only 35% of their spouse’s PIA amount. 

If a spouse files for benefits before they reach full retirement age, they cannot choose which benefit to receive. They must col­lect the largest benefit to which they are entitled. Both retirement benefits and spousal benefits are permanently reduced if claimed before full retirement age. One of the conditions for filing for spousal benefits is that the spouse whose earnings record is being used to fund spousal benefits must be receiving benefits themselves. 

There are a couple of exceptions:

1) For individuals who were eligible to file and suspend their benefits before April 29, 2016, their eligible spouses and dependents can receive benefits without the requirement that the retired worker be collecting benefits.

2) For divorced spouses, one spouse need not be receiving their retirement benefits for an ex-spouse to receive spousal benefits on their earnings record.

 

The Bipartisan Budget Act of 2015 changed some Social Security rules and one of the biggest changes was to gradually eliminate the ability for one spouse to file for restricted spousal benefits, which allowed one spouse to receive spousal benefits while their own retirement credits could earn delayed retirement credits of 8% a year from age 66 (FRA) to age 70. However, if you were born on or before January 1, 1954, you still qualify to file for spousal benefits only. For example, Spouse A, who is 66, files for spousal benefits on their Spouse B, who is also 66 and receiving their own retirement benefits. Spouse A will receive 50% of Spouse’s PIA while their own retirement benefits earn 8% a year for 4 years. 

At Carr Wealth Management, LLC, we specialize in identifying the optimal claiming strategy tailored to each client’s needs. Please contact us to schedule a no-charge consultation or if you simply have a question about Social Security Benefits or other financially related planning areas.


Click Here for Spousal Benefit Example

Click Here for Main Social Security Planning Page

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