Many of our estate planning clients rely on social security as part of their income.
Although we usually think of Social Security in terms of what a person qualifies for based on their working years, it is possible for a spouse (or former spouse in the case of divorce) to receive Social Security benefits even if they never worked themselves.
Whether you are married now or were married in the past, it’s likely that you are eligible for Social Security spousal benefits, as reported in the article “How to Maximize Social Security With Spousal Benefits” from U.S. News & World Report. Spouses who devote their lives to raising families and performing other tasks that are of value to society are entitled to a spousal benefit, based on their spouse’s primary insurance benefits. If you decide to take spousal benefits, the amount you receive will be determined by a few factors, including your spouse’s full benefit, when you begin payments, and your own work history.
Here’s what you can expect when applying for Social Security spousal benefits:
You may receive up to 50% of your spouse’s Social Security benefit,
You can apply for benefits if you have been married for at least one year.
If you have been divorced for at least two years, you can apply if the marriage lasted ten or more years.
You should be aware that if you start taking benefits early, it’s likely that your own benefits will be smaller than if you took them later. And if you have a work history of your own, you’ll either receive your own benefit or your spousal benefit, whichever is greater.
Want to maximize your spousal Social Security benefits? Start by learning what your benefit would be, and then look at the timing. When you decide to claim will have an impact on your benefits. You’ll need to have been married for at least one year before applying. And you also need to be at least 62 years old.
Also, your spouse must have started to apply for benefits for you to claim spousal benefits.
If you have been divorced, you must have been married to your ex for at least ten years to be eligible for a spousal benefit through your ex’s Social Security. What’s more, you will have to have been divorced for at least two years, and still be unmarried. If you are considering divorce, are near retirement and are planning on a spousal benefit, it’s a good idea to consider electing your spousal benefits before the divorce is finalized.
If there have been multiple marriages and divorces, you can choose to take the highest spousal benefit, if the other requirements have been met. Make sure to save your ex’s Social Security numbers and their dates of birth, just to make the enrollment process easier.
If you have a work history of your own, you may be eligible for a personal benefit. If this is the case, you can receive your own benefit if it is greater than the spousal benefit. Let’s say you are eligible for $1,000 as a personal benefit and $500 for a spousal benefit. The Social Security Administration will send you the higher amount of $1,000.
There’s plenty of information about spousal Social Security benefits at the Social Security Administration’s website or at your local SSA office.
Your spousal benefit will be 50% of your spouse’s benefit at their full retirement age. In 2019, the full retirement age is 66 and will rise soon to 67.
So, if you are married and your spouse is collecting $2,000 a month, your spousal benefit would be $1,000 if you wait to start payments at your own full retirement age.
Note that spousal benefits do not grow until age 70, like personal benefits. Instead, they max out at full retirement age. So, there’s no benefit to delaying a spousal benefit claim past your full retirement age.
Should you need to collect spousal benefits before your full retirement age, expect to receive a lower amount. Filing early for spousal benefits reduces your income forever, but many people file because they need the income.
Reference: U.S. News & World Report (July 10, 2019) “How to Maximize Social Security With Spousal Benefits”