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What You Need To Know About Spousal And Survivor Social Security Benefits

As husband and wife, you have been there to support, love, and encourage one another each and every day. Through all of life’s journeys, the ups and downs, the ebbs and flows, you have been together every step of the way. 

Teamwork has been a cornerstone in building and growing your life together. You have used it to develop dreams, hopes, and designs for your life, and retirement planning is no different. Your retirement goals, lifestyle, and income plan have all been created together. Married couples also have a unique opportunity to create a Social Security plan that supports both people. One part of that plan comes from understanding spousal Social Security benefits. 

What are spousal Social Security benefits, how do they work, and what can you do to maximize them? Let’s find out. 

What are spousal benefits?

Spousal Social Security benefits allow one spouse to claim benefits off of the other spouse’s work record. This system helps support households that had one spouse serving as the primary earner. The benefit amount depends on a few factors including the age you collect, your spouse’s primary insurance amount (PIA), and whether you have your own benefits available to you. 

The maximum spousal benefit is 50% of the primary earner’s PIA. In order to be eligible for a spousal benefit a few things must be true:

  • You are at least 62 years of age
  • You have been married for one year (or more)
  • Your spouse has already started collecting benefits
The earliest age to collect spousal benefits is 62, but similar to collecting early off of your own record, this will decrease your monthly benefit by about 30%. While it might make sense for some couples to collect early, be sure that you discuss this with your planner before permanently reducing your benefit. Most likely, your full retirement age will be somewhere between 66 and 67. Consult the Social Security Administration’s chart to gain a clear sense of yours. 

Remember, the maximum benefit you can receive is 50% of your spouse’s total benefit. Unlike traditional Social Security, spousal benefits don’t accrue delayed retirement credits eliminating any incentive to collect later than your full retirement age. 

In order to start collecting benefits, your spouse must already be collecting their own benefits. Keep in mind that the amount of your benefit is always based on your spouse’s primary insurance amount. This means that your benefit won’t be reduced if your husband or wife collects their benefits early. 

Spousal benefits can be complex. To help, let’s take a look at a fictional example of a married couple to illustrate how this works. Mae and Skye have been married for 30 years. Skye is a successful entrepreneur and Mae works part-time at the local library and raises their 4 children. Skye’s maximum monthly benefit is $2,000 and he collects at his full retirement age. If Mae claimed spousal benefits at her full retirement age, she would be eligible for $1,000. 

But if both Skye and Mae are eligible for their own benefits, the Social Security Administration would pay benefits off of their individual work records first before any spousal benefits kicked in. 

Let’s say that when her kids went to school, Mae not only worked at the library but also followed her passion of designing floral arrangements. It may have just started with a few local church events but steadily grew into a top floral business for graduations, weddings, and other events. In this scenario, Mae’s Social Security benefit would be $1,500. Since this is higher than what she would have received from a spousal benefit, the SSA would pay her the higher of the two amounts.

But if Mae stayed at the library, her monthly benefit would only be $500. In this case, the SSA would pay her the $500 off of her work record and supplement another $500 from spousal benefits to reach the $1,000 maximum. 

Understanding survivor benefits

Should your spouse pass away, you are eligible for a survivor benefit as early as 60. Each year that you claim benefits before your full retirement age, your benefit is reduced. But if you have already reached your full retirement age, you can collect your late spouse’s full benefit. 

Widows and widowers do have a unique opportunity to make the most of their benefits. Unlike traditional spousal benefits, survivor benefits allow you to restrict your application. This means that you can apply for either your survivor benefit or your personal benefit and switch applications at a later point. This strategy usually makes sense for people who have strong work records themselves. They can start by claiming their survivor benefit and wait until they have accrued all of their delayed retirement credits and apply off of their own work record at 70. 

If you and your spouse have both claimed benefits and then one of you passes away the Social Security Administration will continue to pay the surviving spouse either their own payment or their late spouses but not both. Keep in mind that you would receive the higher of the two amounts, making claiming Social Security benefits a strategic long-term decision. 

Every couple’s needs are different. Be sure that you work with an advisor who can help you make the most of your benefit in the short and long term.

Social Security + You

Spousal benefits are an important part of your retirement income plan. It is vital that you and your spouse make strategic decisions about Social Security because it will impact you in the short-term but more importantly in the long run as well. 

There are different strategies to consider when it comes to claiming benefits but it all comes down to your income needs, retirement goals, lifestyle considerations, and future needs. Ready to craft a Social Security strategy for your needs? Schedule a complimentary initial strategy session with our team today.