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Social Security gets its fair share of criticism — it doesn’t pay seniors enough, its raises are paltry, and its rules are complex. But one good thing about Social Security is that it takes care of people who spent a lifetime raising a family and therefore never had an opportunity to work.
If you fall into that category, you should know that once you’re older, you may be entitled to income from Social Security in the form of spousal benefits. But spousal benefits don’t work exactly like regular benefits. Here are a few key things to know if you’re planning to collect benefits based on a spouse or former spouse’s earnings record.
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1. You’re capped at half of your spouse or ex-spouse’s benefit
Spousal benefits are available to people who are both married to and divorced from people who are entitled to a benefit of their own. But regardless of which category you fall into, the most you can collect is half of what your spouse collects. If your spouse’s benefit comes to $1,800, you’ll be entitled to $900.
2. You can’t collect your own benefit plus a spousal benefit
It could be the case that you worked part-time or for several years, and earned enough credits to be entitled to a benefit of your own. If that benefit is lower than what you’d get via a spousal benefit, it pays to claim a benefit based on your spouse or former spouse’s record — but you can’t have both.
Say that based on your earnings record, you’re entitled to a monthly Social Security benefit of $800. If half of your spouse or ex-spouse’s benefit leaves you with $900 a month, then it pays to collect $900 versus $800. But to be clear, you won’t be able to walk away with $1,700 a month.
3. You can’t grow a spousal benefit
As mentioned earlier, spousal benefits work differently than regular benefits. With a regular benefit based on your own earnings history, you’d have the option to delay your filing beyond full retirement age. Doing so would mean growing your benefits by 8% a year, up until age 70.
With a spousal benefit, the most you’ll collect is half of your current or former spouse’s benefit at your full retirement age. There’s no sense in delaying your filing because if, for example, you’re eligible for a $900 monthly spousal benefit, that’s the maximum you can get.
That said, you should also be careful not to claim a spousal benefit too early. You’re allowed to do so starting at age 62, but if you file for a spousal benefit ahead of your own full retirement age, you’ll wind up with a reduced benefit for life.
4. You can’t claim a spousal benefit before your spouse if you’re married
Divorced seniors have the option to claim spousal benefits even before their former partners sign up for Social Security themselves. But if you’re still married, you can’t collect a spousal benefit until your spouse files a claim.
It’s for this reason that planning for retirement together and getting on the same page is so important. If you’re older than your spouse, for example, you may want your spouse to file for Social Security on the earlier side so you can both collect a benefit and retire. But your spouse may have other plans, so you’ll really need to sync up.
Though Social Security may not be perfect, it does at least take care of seniors who aren’t entitled to benefits themselves. If you’re eligible for a spousal benefit, be sure to read up on the rules so you can plan appropriately for your later years.
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