Social Security: Maximizing Spousal Benefits | [3 Tips Inside]

Social Security offers a number of benefits to working spouses, although many people are unaware of these benefits or unsure exactly how they work. Who can benefit from these benefits, how much can a spouse receive, when benefits can begin, and many other questions often arise. There is also the issue of deceased spouses and ex-spouses, so how is a spouse’s benefit affected by a death or divorce? If you or your spouse is considering Social Security benefits, keep reading. This article will explain everything you need to know to qualify for these important benefits.

Who is entitled to social security spousal benefits?

The name would imply that the spouse of a benefit recipient is eligible to receive these marital benefits . While this is true, there are also some special cases that we will cover here. The most basic case of eligibility is the spouse of a beneficiary of the benefit. If your spouse is entitled to benefits, you are also entitled to spousal benefits. You must be at least 62 years old and your spouse must have already applied for benefits. If you are entitled to your personal benefits, you will receive the higher amount, your personal benefits or marital benefits.

These spousal pension benefits also apply to same-sex married couples. Since the 2015 Supreme Court ruling, same-sex couples are entitled to the same benefits as other couples. In some cases, the Social Security Administration also recognizes civil unions or other legal non-marital relationships. If you think you are eligible for benefits, go ahead and apply.

Former spouses can also benefit from the benefits, although in this case there are some additional rules that must be followed. First, the marriage must have lasted at least 10 years. Also, you don’t have to be married right now. Finally, the requirement that the spouse must already receive benefits is relaxed. If the divorce happened more than two years ago, you can go ahead and apply for the spousal benefit regardless of whether your ex-spouse has already applied. This prevents the former spouse from not applying for benefits for the sole purpose of withholding benefits from you.

The last group of people who can benefit from these benefits are widows and widowers. As long as your spouse has 10 years of work credits, you can receive benefits even if your spouse is not near retirement age at the time of your death. You can claim these benefits as soon as you turn 60, although it’s best to wait until full retirement age (FRA) if possible. Applying early will reduce the amount of benefits you will receive.

How much to expect from marital benefits

The general answer to this is simple, even if the devil is always in the details. Generally, the amount of marital benefits will be 50% of the amount of benefits to which the spouse is entitled. This assumes that you wait until full retirement age to start receiving your benefits. However, not everyone can afford to wait until age 67 to receive such benefits. This age is reduced to 66 years for those whose year of birth is before 1955.

To calculate marital benefits, you first need to know how much Social Security pays for primary benefits. This is a somewhat complex calculation based on your lifetime earnings record and any necessary adjustments. The more you earn during your working years, the more benefits you can expect to receive when you retire. However, you should not expect your income to be completely replaced by Social Security. The average Social Security retirement benefit in 2021 is $1,543 per month. So, cut in half and find that the average spouse’s benefit is about $772. Now we’ll look at some factors that could cause a payout difference.

Your spouse’s benefits will be based on your spouse’s normal retirement benefits, regardless of when your spouse retires. You can apply for these benefits starting at age 60, although you can expect a significant reduction in benefits if you file early. The exception here is if you are caring for a disabled child. If you care for a disabled child, your benefits will not be reduced. On the other hand, there is no reason to wait beyond full retirement age to apply. These benefits can never exceed 50% of your spouse’s normal benefits, so waiting longer to apply will not add anything to your benefit amount.

Marriage benefits for divorced and widowed spouses

If you are divorced or your spouse is deceased, you may still be eligible for monthly benefits due to your former spouse’s work history. Here we will cover the details of how each of these situations is handled.

Marriage benefits for divorced spouses

Some people may think that divorcing their spouse prevents them from receiving these benefits in the future. However, this is not the case. You may still qualify for benefits based on your former spouse’s work credits and benefit amount. If you are entitled to your old-age pension, you will receive the larger of the two. You should know that there are some requirements that you must meet to qualify for benefits if you are no longer married.

The first requirement is that your marriage must last at least 10 years. If you have been married for a period shorter than this, you will not be able to claim benefits. Thereafter, you must wait until at least age 60 to claim these benefits. Claiming benefits this early will result in reduced benefits, so it’s best to wait until full retirement age if possible.

The final requirement is that your ex-spouse must have already applied for or received benefits in most cases. If the marriage ended more than two years ago, you can continue and claim your benefits regardless of whether your ex-spouse applied for them or not.

Marriage benefits for widows and widowers

These benefits are technically called survivor benefits and there are some special rules that come with them. The most important distinction in this case is that the survivor’s benefit is equal to 100% of the decedent’s benefit amount. If your spouse is eligible for benefits and dies, you may be eligible for these benefits as long as the marriage lasted 10 years or more. Even if your spouse dies well before retirement age, you may still be eligible as long as your spouse has 10 years of work credit.

Again, to receive the full benefit amount, you must wait until full retirement age to claim benefits. You can apply from the age of 60, but the benefit can be reduced by up to 71% of the normal benefit. You can never receive more than 100% of your deceased spouse’s benefit amount, so you don’t need to wait until retirement age to claim your benefits.

This situation can get a little complicated if you are currently receiving marital benefits and your spouse dies. You can convert your benefits to survivor benefits that will substantially double the amount you receive and generate a higher benefit. You should do this as soon as possible because SSA will not normally make these retroactive payments. One last note to keep in mind is the situation that could arise if you remarry. If you remarry before age 60, you will no longer be entitled to deceased spouse’s benefits.

3 tips to maximize your marital benefits

Everyone wants to receive the maximum benefit possible, and that makes sense. It simplifies retirement planning and gives you a little more breathing room within your budget. After all, you or your spouse have paid all those social security taxes during your working years, so why not take advantage of them as much as possible? Here are some tips to maximize your benefits based on your specific situation.

1. Maximize benefits for divorced spouses

There are a couple of tips here to help you maximize the amount you will receive. First, don’t get married again! If you remarry, you will no longer be entitled to your former spouse’s marital benefits. Not only will this reduce your benefits, it will bring them down to zero. Since the marriage must last ten years before you can qualify for marital benefits, it will be some time before you can qualify with your current spouse.

Therefore, wait until your full retirement age before applying for benefits. Although you can apply as early as age 60, the earlier you apply for benefits, the lower your payments will be. The amount can be up to 32% of your former spouse’s primary insurance amount, but if you wait until full retirement, the amount will be 50%. Therefore, the two most important takeaways here are to not remarry and to wait as long as possible to reap its benefits.

2. Maximize benefits for widowed spouses

This situation can get a little more complicated, especially if you have your earnings history and can take advantage of your benefits. The first two tips are more or less the same as in the last section. First, don’t remarry before age 60. If you do, you will no longer be able to claim your deceased spouse’s survivor benefits. Also, waiting until full retirement age will entitle you to higher payments than when you apply when you turn 60.

In certain situations, a surviving spouse may need to convert marital benefits to survivor benefits if the spouse dies after benefits began. You may be able to convert survivor benefits to employment history benefits. Some people try to collect survivor benefits at age 67 and delay the start of their benefits until age 70 to accumulate late retirement credits on their own. This increases your benefit amount and could result in a higher monthly payment. This was called a limited claim, but this loophole for social security marital benefits was closed as of 2015. Now, if you file a claim, that claim covers all benefits you may be entitled to.

3. Delay applying for benefits

This is a recurring theme, but postponing your application for benefits will help you get as much money as possible when you start receiving Social Security payments. If you are receiving marital or survivor benefits, there is no reason to delay your application beyond full retirement age. These benefits are based on the spouse’s normal benefit amount and can never exceed 50% or 100% of that amount, respectively. However, delaying the start of your benefits until age 70 will increase your normal benefit amount. In previous years, you may have elected to receive a benefit based on your spouse’s work history at age 67, while you were waiting for your 70th birthday to apply for Social Security benefits. This practice, however, is no longer allowed.

The bottom line

Here are some key things we’ll highlight when it comes to receiving Social Security marital benefits. First, you do not need to be currently married to receive these benefits. Even if you are divorced or your spouse is deceased, you can still receive these benefits in many cases. Likewise, same-sex spouses are also entitled to these benefits. Delaying the start of benefits until you reach full retirement age will ensure that you receive the most benefit money possible. While you can start receiving reduced benefits as early as age 60, that doesn’t make sense for most retirees. Finally, if you think you may be eligible for benefits, go ahead and apply! If you don’t claim benefits, you definitely won’t get them.

Frequently asked questions (FAQ)

Are marital benefits taxable?

Marital benefits follow the same tax rules as primary social security benefits. Whether or not your benefits are taxed depends on your overall household income. If your combined income is less than $32,000, you will not have to pay any income tax on your benefits. If your income is between $32,000 and $44,000, you will have to pay taxes on 50% of your benefits. Finally, if your income is over $44,000, you will need to pay taxes on 85% of your benefits.

What is the difference between marital benefits and retirement benefits?

These two elements are very similar and quite related to each other. Retirement benefits are what you receive as a result of your work history and payments into the social security system. This means that you were the wage earner and are receiving benefits from the taxes you paid. Marriage allowances are paid to the spouse of the main breadwinner. These benefits are limited to 50% of the primary benefit amount, and a current or former spouse may receive these benefits in certain situations.

What is the greatest benefit for the spouse?

The maximum spousal allowance is 50% of the primary allowance. This assumes that you wait until full retirement age to start receiving the benefit. Some people choose to start receiving their benefits early. You can begin to enjoy this benefit from the age of 60, although the benefits will be reduced. At age 60, you would receive about 32% of the principal benefit. It’s worth the wait, as a few months can make a noticeable difference in the amount you’ll receive each month.

When can a spouse apply for marital benefits?

Generally, a spouse can start receiving these benefits at age 60 if the main breadwinner has already claimed benefits. If the primary breadwinner has not yet claimed benefits, the spouse must wait for this to happen before claiming marital benefits. The rules are slightly different for those who may have a disability pension. If you are disabled, you can apply for marital benefits as early as age 50. Also, you must have been married to your spouse for at least 10 years to claim these benefits.