Understanding the nuances of spousal benefits is crucial to maximizing your household’s Social Security payments. For example, if you’re set to collect $3,500 per month from Social Security at full retirement age, your spouse may be eligible to receive $1,750 based on your earnings record, although this won’t happen automatically. Eligibility for spousal benefits ultimately hinges on several factors, including your wife’s age and her own earnings record.
To get more details about spousal benefits or help with retirement planning, talk it over with a financial advisor.
Spousal Benefit Basics
Social Security spousal benefits are generally not accessible to a spouse until they reach age 62. However, there are exceptions to this rule. For instance, if a spouse cares for a child under the age of 16 or a child with a disability who is eligible for benefits based on your record, they may qualify for these benefits at any age.
Spousal benefits are only disbursed if they surpass the benefits the spouse would receive based on their own earnings record. Social Security determines the higher amount and pays that sum. Typically, one can collect spousal benefits only if the higher-earning spouse has already initiated their benefit claims.
Several other factors may affect the payment amount. For example, spousal benefits are calculated based on the higher-earning spouse’s anticipated amount at full retirement age (FRA). A spousal benefit can be worth up to half of that sum. This remains true regardless of whether the higher-earning spouse claimed their benefits before or after reaching FRA.
The age at which a person claims spousal benefits also influences the benefit amount. While spousal benefits can be claimed as early as age 62, claiming before reaching FRA results in a permanent reduction of benefits of up to 35%.
As you can see, planning for Social Security can get complicated. That’s why it may be beneficial to speak with a financial advisor to see how big of a role your benefits will play in your retirement income plan.
Estimating Spousal Benefits
Returning to our hypothetical scenario from above, in order to claim her spousal benefit, your wife would have to contact Social Security when you start collecting your own. When she does that, however, she wouldn’t specifically request a spousal benefit. She would simply request Social Security benefits.
If your wife is eligible for Social Security retirement benefits based on her own earnings record, she will receive an amount equal to her own benefit or the spousal benefit, whichever is higher.
Assuming both of you have reached FRA and her own retirement benefit doesn’t exceed half of yours, she could receive up to $1,750.
But what if she hasn’t reached FRA yet and wants to collect her spousal benefit as early age 62. In that case, your wife’s spousal benefit would be reduced by up to 35%. Instead of collecting the maximum spousal benefit of $1,750, she would receive just $1,137.50 per month.
Additionally, if she files between the ages of 62 and FRA, her spousal benefit will be reduced by 25/36 of 1% per month for the first 36 months and 5/12 of 1% for each additional month.
Finally, Social Security limits the combined benefits a family can receive. So, if other members of your family, such as a disabled child, were already receiving benefits, this could reduce the amount of spousal benefits your wife would be eligible for.
If you need help calculating spousal benefits or deciding when to claim Social Security, talk it over with a financial advisor who offers retirement planning services.
Bottom Line
Your spouse may be eligible to receive spousal benefits from Social Security but these benefits aren’t paid out automatically. Instead, they must be claimed. They are typically set at half the amount you would receive if you claimed at full retirement age. However, a spouse who claims these benefits before their own FRA may result in a permanent reduction.
Social Security Planning Tips
- A financial advisor can help you cut through the tricky calculation of spousal benefits to determine how much you can expect from Social Security. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Estimating how much your Social Security could be worth at different claiming ages is an important part of deciding when it may be the right time to start collecting. SmartAsset’s Social Security calculator can help you estimate what your own monthly payment will be at various claiming ages.
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