Social Security Spousal Benefits

Social Security Spousal benefits are more complicated than earned benefits. Individuals who are eligible to collect Spousal benefits must be married for a minimum of one year unless he/she was previously married for a minimum of 10 years and was collecting an ex-spousal benefit before remarriage. The Spousal benefit is actually a combined benefit which consists of one’s earned benefit and a stipend to reach the spousal benefit amount. As an example:

  • John is collecting his earned Social Security benefit and his Primary Insurance Amount (PIA) is $2,000 a month. PIA equals Full Retirement Age (FRA) benefit. For Spousal benefits we always use PIA, meaning it doesn’t matter if John began collecting a reduced benefit at age 62 or maximized his benefit at age 70.

  • Julie (John’s wife) turns Full Retirement Age and decides to begin her Social Security benefit. Her PIA is $700 a month. Since Julie is at her Full Retirement Age, she is eligible to receive a Spousal benefit of $1,000 a month (50% of John’s PIA). I don’t want to confuse the issue, but it is important to know that in reality Julie is receiving her earned benefit of $700 a month and in addition she receives a Social Security stipend of $300 a month to reach the Spousal benefit payment of $1,000 a month.

Let’s change this scenario a bit and pretend that Julie begins her Social Security benefit at age 62 and we’ll assume her Full Retirement Age is 66 (true for those born in 1943 through 1954). We’ll also assume that John hasn’t started his earned benefit yet, meaning Julie isn’t yet eligible for a Social Security spousal benefit.

  • Julie would receive 75% of her PIA, so her monthly Social Security benefit would be $525 a month ($700 x 0.75).

Later in life Johns starts his earned Social Security benefit, and well assume that Julie is at least Full Retirement Age when John starts his benefit. Julie is now eligible for a Social Security Spousal benefit and she must reapply for this Spousal benefit. What will she receive?

  • Julie would receive $825 a month. Since she began her earned benefit early, the 25% monthly reduction of $175 to her earned benefit ($700 - $525) remains, but since she is now Full Retirement Age when she applies for her Spousal benefit, her stipend is not reduced. Adding the $300 ($1,000 - $700) Social Security stipend to her $525 earned benefit would net Julie an $825 monthly benefit. Yes, it’s somewhat complicated.

Unlike earned benefits which provided delayed retirement credits up to age 70, Social Security Spousal benefits are maximized at Full Retirement Age. Thus, if a person’s Spousal benefit is larger than his/her earned benefit would be at age 70 with delayed retirement credits, there is no advantage in waiting beyond Full Retirement Age to collect Social Security income. 

Ex-Spousal benefits work in exactly the same manner as Social Security Spousal benefits.  To be eligible for an ex-spousal benefit, one must have been married for a minimum of 10 years before marriage dissolution, and the individual must remain unmarried.  If a person who meets these criteria remarries, the ex-Spousal benefit would end, and the (new marriage) Spousal benefit would begin. It’s worth checking benefits before making this decision as remarriage could create loss of Social Security income if the new “Spousal Benefit” is less than the existing “ex-Spousal benefit.

When one applies for ex-spousal benefits, the “Ex” is not notified. Additionally, the amount of ex-Spousal benefit received has no effect on one’s ex-spouse or their current and former spouses may receive. 

People born before January 2, 1954 have an additional option available which us younger folks no longer have. They can file a “restricted benefit” at or after attaining FRA if their spouse has already filed for Social Security benefits. These individuals can actually “restrict” their earned benefit, not open their earnings record, and collect a Spousal benefit while their earned benefit continues to grow with delayed retirement credits. After collecting a Social Security Spousal benefit, he/she can switch to their larger earned benefit taking advantage of these delayed retirement credits. Here’s an example in case this situation applies to you.

  • John and Jill were both born in 1953. Jill’s PIA is $1,200 and John’s is $2,000. Jill starts her earned benefit at 66 (her FRA), and collects $1,200 a month. John, who is also FRA “restricts” his benefit to a Spousal benefit and receive $600 a month (50% of Jill’s FRA). John and Jill will continue to receive this combined Social Security benefit income of $1,800 a month until John reaches age 70, where his earned Social Security benefit is maximized.

  • At 70, John applies for his earned benefit which has increased 32% (8% per year) since his Full Retirement Age. He will now receive $2,640 per month and Jill will continue to collect her $1,200 a month. Their combined Social Security benefit is now $3,840.

 Understanding one’s benefit options and coordination opportunities can make a big difference. In this last example, John postponed his earned benefit for four years to maximize his Social Security income while collecting a spousal benefit worth $28,800. An important consequence in John waiting until 70 to begin his earned benefit is maximizing his family’s Survivor benefit. In this case it grew to $2,640 and it will protect Jill should John die first.

This website’s resources will help educate you on Social Security benefits. If you prefer personalized assistance to better understand your options, or if you desire help with signing up for Social Security benefits, please schedule a phone appointment with one of our specialists.

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