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What You Need to Know About Social Security Spousal Benefits

What You Need to Know About Social Security Spousal Benefits

When it comes to social security spousal benefits, one small mistake could prove costly. Knowing the rules can make all the difference come retirement when every dollar counts.

Here's what you need to know.

For spousal benefits, the Social Security Administration calls the person taking the benefit the “spouse” and the other the “worker”, even if both are eligible for retirement benefits based on their own work history. Typically, the spouse taking spousal benefits will receive 50 percent of the other spouse's primary insurance amount (PIA), defined as the benefit the spouse would receive at full retirement age. A general rule of thumb is that, all other things being equal, the spousal benefits will exceed the “spouse's” own benefits if their PIA is less than 50 percent of the “worker's” PIA.

“This rule is not perfect and age differences can have a substantial effect, so this may not be the best strategy in an all cases, especially depending on the goals of the recipients,” explains Neil Cooper, a senior financial analyst with T. Rowe Price.

For example, if a couple consists of two top earners, both 60, both delaying retirement until age 70, and both have a full retirement age of 55, generally the spouse with the lower PIA ought to claim the spousal benefits, but this can vary with age and specific strategy needed to match a specific goal. Suppose this couple both have the maximum PIA from 2012, $2315 per month. They would receive spousal benefits, in today's dollars of $1,256.60 per month, or $15,078 per year, for four years, for a total of $60,312 in extra income in their 60s, just by asking for it.

Timing counts

You may not have to wait until you're 62 to collect. If you are a widow or widower, you can collect at age 60, says Curtis Cloke, a financial advisor with Two Rivers Financial Group. If you are divorced from a former spouse whom you were married to for 10 years or more and you are not remarried, when the former spouse dies, you may be eligible to collect Social Security as early as 60.

However, you don't want to jump the gun. Just because you have reached your full retirement age doesn't mean you're eligible yet for spousal benefits, says Cloke. While you can apply for your Social Security benefit based on your own work record once you're 62, you cannot claim a spousal benefit until your spouse reaches his or her full retirement age and files for his or her benefits.

Don't miss opportunities

If a spouse did not work, they are still eligible for Social Security benefits equal to 50 percent of their working spouse's full retirement amount. When the working spouse dies, the surviving, nonworking spouse, is entitled to 100 percent of their deceased working spouse's retirement benefits, says Tom Corley, author of Rich Habits – The Daily Success Habits of Wealthy Individuals.

If you are divorced after a marriage of at least 10 years and not remarried and are at your full retirement age, you may be eligible to take benefits from your former spouse while allowing your Social Security benefit to be delayed for future higher payout. “In the event of multiple marriages, you get to pick from the best income record from all former marriages, as long as you were married for at least 10 years or more to each one,” says Cloke.

Understand file and suspend

A spouse cannot collect on their spouse's account until their spouse begins collecting. There is an exception, however. The working spouse can “file and suspend” (apply for Social Security benefits and then immediately apply to suspend collecting benefits). File and suspend is an option that becomes available to the worker at their full retirement age or any time after. What's the advantage of file and suspend? File and suspend allows the primary wage earner to apply for benefits, then suspend collecting, while allowing the other spouse to collect immediately and to continue collecting. The primary wage-earning spouse can wait to claim benefits until age 70. The upside of that is that it increases the future individual Social Security benefit.

A word of caution though about file and suspend, if spouses have earned similar amounts over their careers, the 50 percent spousal benefit might not add up to more money, and it may be better to draw individual benefits. The good thing is, if you go the file and suspend route and change your mind before you turn 70, you can reinstate your benefits.

It's not only about you

Most married couples consider their own longevity when determining whether it makes sense to delay or take Social Security early. In reality, since the Social Security received by the spouse with the highest benefit serves the surviving spouse at the first spouse's death, a couple should consider the longevity of the oldest surviving spouse and not just their own when determining the optimal choice for electing benefits, points out Cloke.

The bottom line? There's a lot to digest. “Don't make an assumption about Social Security spousal benefits without speaking to an expert. Bring Social Security into the overall financial plan and make your decisions in that context,” says James Mahaney, vice president strategic initiatives at Prudential Financial. Start your research here, ssa.gov and socialsecurity.gov.

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Anonymous   |     |   Comment #1
Sheryl, this info is and has been available on thousand other web sites with more details and samples included. There is nothing you offer in this article that can be considered valuable info.
SS is fazing out the file and suspend option and they are wising up on the other schemes.
Also, there are few more option that I know off that you did not mention.
Anonymous   |     |   Comment #4
#1  Does it occur to you that many may not take the time to research other articles and at least Sheryl brings their attention to the subject?.  If you are so learned about it, why didn't Ken get you to write it instead of Sheryl?  Just wondering.
Anonymous   |     |   Comment #6
#1 is correct, most of you act like trolls, protecting Ms. Nash.
There is nothing in her article that makes me learn anything new.
After all, nobody cares nor will come here to read about SS benefits.
Roush   |     |   Comment #2
Maybe instead of ragging on the author you could offer something positive and helpful? You seem to be a person of vast knowledge on the subject.

BTW, nice article Sheryl.


Anonymous   |     |   Comment #3
I have heard many different stories about the spouse's social security being 50% of the other spouse's amount.  This is a very grey area.  SS website doesn't make it clear either.

if the higher wage earner began receiving SS benefits at 65 but full retirement was 66 what is the amount that the 50% is taken from?  And if the SS benefits are delayed until 70 is the 50% taken on that higher amount?
Anonymous   |     |   Comment #5
Just wondering if the ss information applies to railroad retirement beneficiaries??
Anonymous   |     |   Comment #7
These off topic articles are poorly written and poorly researched and lacking in depth.

They make a shallow Money Magazine article seem like a PhD thesis!

How about something relating to bank deposits?

Why the need to fill this site with off topic fluff?
Anonymous   |     |   Comment #8
Seems like it never fails to happen - Haters gonna' hate.
Anonymous/Paoli   |     |   Comment #9
And since when doesn't Social Security funds NOT relate to money or bank deposits?  Are you cashing your checks in for glazed donuts??  It all has to do with money and helping us learn how to get the most we can.  And you think "we" are the trolls??  Ken can post Mad Magazine articles on here and you don't have to read it but maybe some of us like the articles so take your glazed donuts and deposit them in your mouth!
Rosedala   |     |   Comment #10
Roush #2, Anonymous #4, Paoli #9, thank you for telling it like it is to those obnoxious "Anonymous #1", "6", "7"...and those who voted for them!!!  I would've been rougher on them lol!  Hiding in anonymity, in contrast to the normal anonymous commenters here, they have no balls to identify themselves by name under their stupid blabbers.  Why don't they go to the other sites and leave us alone???  I recognize them by their "type" to always be so critical of the very useful blogs that appear here.  Their comments eat up valuable space here and robbing us of our time.  They are useless and undesirable.  I think there's just cause to ask them to unsubscribe, and/or for us to "impeach" them?   :(
Anonymous   |     |   Comment #11
Everything in life has something to do with money.  If you think otherwise, try living without it.
Anonymous   |     |   Comment #14
By the time I qualify for SS benefits, there will be none. See this poted by the treasury:


Since Obama has taken office ….
[through Q2 2012 for comparative purposes]

--> For every $1 added to the economy, we’ve added more than $3 in debt

--> added $5.23 trillion in debt vs. $1.68 trillion to the economy
--> 50% increase in debt vs. 12% increase in economic output

Total Public Debt:

$10,626T [Jan 20, 2009]
$15,856T [Jun 30, 2012]

--> $5.23 trillion increase in debt

[source: Treasury Dept] "
Anonymous   |     |   Comment #15
The real scary part about all this is that the voters will probably put Obama in office to truly finish off the job!  What is wrong with people??  If Iran and Israel go at it before the election, you can bet money that Obama isn't going any place.  It's been said that voters will not put out an incumbant president if a war breaks out and Iran is now beginning to sizzle! 
Anonymous   |     |   Comment #16
I retired and took my social security at 62. My wife does not have the credits for her own social security benifets and will be reciving 50% of my social security check. My question is at what age will she be able to collect 50% of my benefits. She was born 08/17/48. I was born 06/30/47.
Anonymous   |     |   Comment #17
To Anonymous #16

To get the correct answer go to your local social security office and talk to them.  The people answering the SS phone lines don't give the correct information.

Her's a link to a website to find your local SS office:  https://secure.ssa.gov/apps6z/FOLO/fo001.jsp
Anonymous   |     |   Comment #18
My DP and I took our SS benefits at 62 and I was a stay at home mom but had worked for a few years.  I was told I would get more benefits taking the part from my DP but I notice it is not 50% of what his is.  I tried to call them last year and was told I am getting the correct benefits but not why it's not 50% of his.  Does anyone know what the criteria is for getting the spouse's 50%?  Thanks.
Anonymous   |     |   Comment #19
#18  It is my belief that YOU would need to be 65 (or 66, if applicable) to get the 50%.
Anonymous   |     |   Comment #20
#19  Thanks.  I was only 62 at the time but the rep said I would get more taking the spouse's amount. Maybe they do give you less if you take it early.  She didn't make this clear so I just did what she said was best for me.  It probably wouldn't have been that much more anyway.
Anonymous   |     |   Comment #21
#20  The break even point is about age 78-79.  After that you start losing money.
Anonymous   |     |   Comment #22
A spouse would only get the full 50% if they are at full retirement age which is no longer 65.  The age of full retirement has been changed based on the year born.  You can find out your full retirement age on the social security website.  http://www.ssa.gov/ From the site: Full retirement age (also called "normal retirement age") had been 65 for many years. However, beginning with people born in 1938 or later, that age gradually increases until it reaches 67 for people born after 1959.
Anonymous   |     |   Comment #23
Thanks for the info.  Since we both opted for early SS at 62, it looks like they gave me a bit less than 50% of what he got for opted in early.  Still glad we did it since interest rates have crashed and we needed the money.
Anonymous   |     |   Comment #24
You'll need to get prepared for congress to cut our SS and medicare benefits.

Take care.
Anonymous   |     |   Comment #25
#24  Congress needs to get prepared for the outburst from Americans "if" it does cut our Social Security. SS is not welfare payments.  It's money they took from our paychecks and if they need to cut anything, they should stop giving money to our enemies!  My Senator got an email from me today on this.  They have a lot of other places to cut before they take more money away from seniors and retirees.  If you want to read how angry these people are, try checking out Twitter.  Some of these people either couldn't or didn't think to save personal money.  If they lose SS, they will just load down the government with more welfare recipients.  As for Medicare, they may as well hire Dr. Kevorkian, imo.
Anonymous   |     |   Comment #26
I don't think anyone in Washington needs to be worried about a "outburst from anyone".  The retirees will just complain and "take it up the you know what" without doing anything.  Remember the tax on SS and 600 billion recently taken from medicare?  NO OUTBURST YET.
Anonymous   |     |   Comment #27
#26    What language are you posting in?  Taxing us on social security and taking it ALL away from seniors is two different things.  Many seniors don't even have to pay taxes on theirs cause they are not in the financial status.  I equated "CUT" with your meaning they were going to end it for us or take most of it all away.  You can CUT a small piece of cake or you can CUT a huge slice!  When I said OUTBURST I was thinking you meant taking most of it away from us.  Of course Americans won't go screaming in the streets if it is just a few dollars but if they take the majority of what many seniors need to survive on away, they will leave them no option.   As for the 600 million that has not affected us personally "yet" and still can be undone if Obama gets put out so I think most people are waiting to see what will happen with the election.    
Anonymous   |     |   Comment #28
#27  As an example of the retirees "just taking it" think about the zero-interest rate policy.  Just that in itself has taken approximately 66% of our interest income.  That's a huge CUT in income.  I heard a lot of complaints but NO OUTBURST.  In fact only 200 people would support the petition.  Yes, I did sign it.
Anonymous/Paoli   |     |   Comment #29
#28  You are right.  Most Americans I know  are very apathetic and wait for others to do what has to be done.  The Savers Petition was a great example of this.  Last I saw this week it had 298 signatures and it was like pulling an abcessed tooth to get people to sign.  It was no longer up when I checked yesterday. BTW, I thank you and anyone on this Blog who took the time to sign.  However, losing SS and/or Medicare is in a different ballpart than even low interest rates.  The former two may be all some seniors have to live on and use for healthcare.  Without them, I, personally, think you would see an "Outburst".  AARP is supposedly having meetings with Obama which people can send questions to because they know how serious an issue this can be.  The dates are listed on Twitter for anyone interested.