Why Social Security Spousal Benefits Stop at Half of Your Partner’s Full Retirement Benefit

Quick Read

• Spousal Social Security benefits cannot exceed 50% of a spouse’s full retirement age benefit, no matter how long you wait to claim.

• Waiting beyond full retirement age does not increase spousal benefits, and filing too late can mean losing up to six months of payments permanently.

• Like other Social Security checks, spousal benefits can still rise over time because of annual cost-of-living adjustments.

Deciding when to file for Social Security is one of the biggest retirement choices you may face. If you claim your own retirement benefit at full retirement age, you can receive your monthly payment without a reduction. For people born in 1960 or later, that age is 67. But there are several other claiming ages to consider.

Spousal benefits work differently. If you are eligible to receive benefits based on your spouse’s earnings record, you do not have the same range of options available to workers claiming on their own record.

Spousal benefits have a built-in ceiling

When you claim Social Security based on your own work history, filing before full retirement age lowers your monthly benefit. Waiting past full retirement age, on the other hand, can increase it.

For every year you delay your own retirement benefit beyond full retirement age, your payment can rise by 8%. That increase stops at age 70, and if your full retirement age is 67, that can mean a total boost of 24%.

That is not how spousal benefits work. If you are collecting a spousal benefit, delaying past full retirement age does not create a bigger check.

Claiming before full retirement age can reduce the amount you receive, but once you reach full retirement age, there is no advantage to waiting. Spousal benefits do not earn delayed retirement credits the way benefits based on your own earnings record do.

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The highest spousal benefit you can receive is 50% of your spouse’s full retirement age benefit. For example, if your spouse is entitled to $2,000 per month at full retirement age, their payment could grow to $2,480 per month if they wait until age 70.

Even then, your spousal benefit would still be limited to $1,000 per month. And if you delay your own spousal benefit claim until age 70, you would still receive the same $1,000 you could have gotten by filing at full retirement age. In short, waiting does not help.

There is another reason not to delay too long: Social Security only pays retroactive benefits for up to six months. If you wait too long to claim a spousal benefit, you may permanently lose money you otherwise could have received.

Your payment can still rise over time

Even though delaying your claim will not increase a spousal benefit, those payments can still go up from year to year.

Social Security spousal benefits, like regular retirement benefits, are eligible for annual cost-of-living adjustments. So if you begin with a $1,000 monthly benefit, future increases can help it keep pace with inflation.

That is different from getting a larger benefit by waiting to file. The annual adjustments can raise the amount over time, but delaying your application does not do that.

Know the rules before you file

Social Security is complicated, and the rules for spousal benefits can be even harder to follow.

That is why it helps to understand the program well before retirement. A clear grasp of the rules can help you decide when to claim and what monthly payment to expect.

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Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)