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  • Writer's pictureDavid J. Perrotto

How does the Social Security Spouse Benefit Work?

Social Security. It’s the social net of many American’s. Many people don’t even realize, even if you have never worked under Social Security, you may be able to get spouse's retirement benefits if you are at least 62 years of age and your spouse is receiving retirement or disability benefits. You can also qualify for Medicare at age 65. It’s important to note what you take does not take anything away from your spouse.

A Social Security spouse benefit is called a “spousal benefit”. It is wide ranging benefit, and applies to current spouses, widowed spouses, and even ex-spouses. It is important to understand how your spouse's benefit may be affected if you take Social Security benefits early, and what happens upon the death of a spouse.

Many people are eligible for a spousal benefit. Both current spouses, and ex-spouses if you were married for over ten years and did not remarry prior to age 60, are eligible for a spousal benefit. You must be age 62 to file for or receive a spousal benefit. Remember, you are not able to receive your spousal benefit until your spouse files for their own benefit first, but this is not the case for ex-spouses. You can receive a spousal benefit based on an ex-spouse's record even if your ex has not yet filed for their own benefits, however your ex must be age 62 or older, and again, you would have to be married for 10 years.

What you can claim as a Social Security benefit is based on either your own earnings record, or you can collect a spousal benefit that will provide you 50% of the amount of your spouse’s Social Security benefit as calculated at their “full retirement age”. If you file before you reach your own full retirement age(FRA), your spousal benefit will be calculated as 50% of what your spouse would get at their FRA, but then it will be further reduced because you are filing early. There are many calculators on to show you the difference when you file. No matter what, you are entitled to receive the benefit that provides you the higher monthly income. If you worked and made more money, you would receive your own social security benefit, and likewise if your spouse made more, you would receive the spousal benefit. This is all automatically done by the Social Security Administration.

One benefit of being born on or before January 1, 1954, after you reach FRA, you can choose to receive only the spousal benefit by filing a restricted application. What this means, is that you delay your own retirement based on your earnings record until a later date. You could continue to collect your spousal benefit until let’s say, age 70, when you would have received a higher benefit from your own. After January 1st, 1954, it goes back to either/or.

If you collect a spousal benefit, and you begin collecting this benefit before you reach Full Retirement Age, your benefit will be permanently reduced. It is very important to understand this. If you collect your spousal benefit early, it will never go higher. Also if you collect any type of benefit before your FRA, and you continue to work and receive earned income, you may have to owe some of your Social Security benefits back. Once you reach FRA you can collect Social Security and earn any amount from working without be subject to any reduction in benefits or penalty. Clearly, SSA makes clearly makes it a point to want people to take their benefits at full retirement age.

Let me give you a scenario where you could permanently reduce your benefit. If your spouse takes Social Security early, let’s say 62 and you take a spousal benefit a year after, at age 62, you will be significantly reducing your benefits by 30-35% paid out over your lifetime and will have permanently reduced the survivor benefit that either of you is eligible for. Married couples can get more in Social Security payments by coordinating how and when they should each begin collecting benefits. You can run these numbers yourself to see how it works by using an advanced Social Security calculator or speaking to a financial advisor.

Special rules apply If you become a widow or widower, SSA allows you can collect a survivor’s benefit as early as age 60. Widows and widowers can restrict their application to file for either their own benefit or the widow/widower benefit, and then later switch to the other benefit amount. You might do this if your own benefit amount at age 70 would be larger than your widow benefit. You could claim your widow benefit for several years, and then at 70 switch to your own benefit. Also, spousal benefits are gender neutral, so it doesn’t matter to SSA

Once a married couple are receiving Social Security benefits, upon the death of your spouse, you will continue to receive the larger of your benefit, or your spouse’s, but not both. This is important to remember, as you will see a dip in a fixed income vehicle. It’s important to note if you have a longer life expectancy, and you are collecting a benefit based on your spouse’s earnings, and your spouse took their benefit before their FRA, you would receive the reduced benefit for the rest of your life as well. This could be thousands of dollars. In many cases it provides the equivalent of 50,000 to 100,000 dollars of extra income by waiting for FRA.

It’s important to sit down with a competent financial advisor to maximize the highest earning benefit for you and your spouse and have a plan of action when to file. Many couples overlook this and end up getting less lifetime income as the result. If you need any help at all to understand how to maximize your social security benefits, don’t hesitate to call me at (718)551-7131.

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