5 Rules for Social Security Spousal Benefits That Could Affect Your Payment

Social Security is one of the retirement benefits many older adults depend on most. In general, workers earn it by paying taxes on wages over the course of their careers.

But retirement income can also come through spousal benefits. If you are married to someone who qualifies for Social Security, you may be eligible for benefits based on that record. Some divorced people may also be able to claim spousal benefits tied to a former spouse’s earnings history.

Spousal benefits are not the same as standard Social Security retirement benefits, so it helps to understand a few important rules before filing.

Claiming early can lower the amount

Just as 62 is the earliest age to claim Social Security based on your own work record, it is also the earliest age to claim spousal benefits. Still, filing at 62 may not be the best move.

Spousal benefits can reach as much as 50% of an eligible spouse’s full retirement age benefit. If you claim before your own full retirement age, the amount may be reduced to as little as 32.5% of your spouse’s full retirement age benefit. Because the starting amount is already limited, waiting until full retirement age can make sense.

Delaying does not increase the benefit

People who claim Social Security based on their own earnings record can earn delayed retirement credits by waiting, up to age 70. Those credits can raise benefits by 8% per year.

Spousal benefits do not earn delayed retirement credits. That means there is no advantage to delaying a spousal claim past full retirement age. Waiting longer will not increase the payment, and it only postpones the income.

You cannot receive two retirement benefits at once

If you qualify for Social Security on your own wage history, you may still be eligible for spousal benefits. However, you cannot collect both at the same time.

Social Security pays only one retirement benefit at a time, and you receive the larger amount. For example, if your own benefit is $1,100 a month and your spouse’s full retirement age benefit is $2,400, your spousal benefit could be worth $1,200. In that case, Social Security would pay the larger amount. You would not receive $2,300 a month.

Spousal benefits can become survivor benefits

Spousal benefits are capped at 50% of a spouse’s full retirement age benefit, but that changes if the spouse dies. At that point, the benefit converts to a survivor benefit worth 100% of the amount the spouse was receiving.

For instance, if your spouse claimed Social Security at full retirement age and received $2,400 a month, your spousal benefit might be $1,200. If your spouse dies, that monthly payment could rise to $2,400.

They are also adjusted for inflation

Many people collect Social Security for years, and without an annual cost-of-living adjustment, those benefits would gradually lose purchasing power.

The good news is that spousal benefits qualify for a cost-of-living adjustment each year, just like regular Social Security benefits. The same percentage increase applies to both.

Those raises may be smaller in dollar terms because spousal benefits are often smaller to begin with, but the payments should still rise with inflation. The same is true if the benefit later becomes a survivor benefit.

Bottom line

Social Security spousal benefits can have a meaningful effect on retirement income. They may not always be the largest possible benefit, but they can play an important role in a household budget.

It is important to understand how spousal benefits work and how they differ from benefits based on your own earnings record. It is also wise to remember that even with Social Security income, retirees usually need other sources of money as well.

Saving, investing, or working part time can help reduce financial strain in retirement. When deciding when to claim Social Security, it is best to look at it as part of your overall retirement income plan.

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