Social Security spousal benefits are probably the most confusing benefit because they are considered a family benefit.
But even more confusing is how the benefit is calculated. First, let’s determine if you are eligible.
To qualify for Social Security spousal benefits:
- Both you and your spouse must be at least 62
- Married at least 1 year
- The other spouse must be receiving their worker benefit
Most people think that they are entitled to 50% of their spouses’ benefit. That’s true only if you are filing for spousal benefits at your full retirement age.
- Spousal benefits are determined at the age you, as a spouse, file. The only relevance your spouse has is the amount of their Primary Insurance Amount (PIA).
- Spousal benefits are calculated using both your Primary Insurance Amounts and your spouse’s Primary Insurance Amount.
- Spousal benefits are layered on top of any worker benefit you may have.
If you have your own worker benefit, you are always paid that benefit first, then any amount of spousal benefit is layered on top of that.
To determine if you are entitled to a spousal benefit, if your own Primary Insurance Amount is greater than 50% of your spouse’s Primary Insurance Amount, you are not entitled to a spousal benefit. For example, your PIA is $1,250 and your spouse’s PIA is $2,000. Since your PIA is greater than 50% of your spouse PIA, you will not receive a spousal benefit and be paid your own worker benefit because it is greater.
Since spousal benefits do not increase after your full retirement age, you should consider filing for spousal benefits at your full retirement age to receive the maximum amount.
Here is a Social Security cardinal rule:
any time you take Social Security benefits before your full retirement age the benefit is always reduced and it’s forever. The reduction for worker benefits and spousal benefits are different.
Below is a chart as to how your spousal benefit is calculated assuming your full retirement age is 66. The percentages will vary depending on your full retirement age. The main point of the chart is to show how spousal benefits are layered on top of your own worker benefit and vary in amount depending on the age you claim at.
When filing for spousal benefits, you also need to keep in mind the following may also apply:
- You cannot receive spousal benefits if your spouse exceeds the annual earnings limitation or voluntarily suspends their own benefit.
- Both spouses cannot receive spousal benefits at the same time.
- You must apply for spousal benefits; they will not automatically begin.
Generally, if you claim spousal benefits prior to your full retirement age, you will not be able to claim your worker benefit in the future. This is because prior to full retirement age, you are “deemed” to be filing for any and all benefits available to you. And remember, you are always paid your worker benefit first. The only way to claim your worker benefit in the future is if you file a “Restricted Application” for spousal benefits only at your full retirement age.
- Annual Earnings Test: this goes away at full retirement age.
- Deemed Filing Rules: this goes away at full retirement age.
- Government Pension Offset: 2/3rds of what you receive from another government pension will reduce your Social Security spousal benefits.
- Family Maximum Rules: limits total family benefits paid off one workers record to between 150% to 180%.
I hope this makes spousal benefits a little easier to comprehend. This article also applies to ex-spouses. The spousal benefit is not just one amount. It is a combination of your own worker benefit and an additional amount from your spouse, if applicable.
Tom R. Hager is in the business of providing peace of mind. As a CPA specializing in Social Security consulting, he has spent nearly 40 years helping individuals and families maximize their retirement strategies. People call Tom “Mister Social Security” for a reason – his driving goal is to help others with real, effective solutions relating to their Social Security claiming strategies as they navigate one of the most important financial decisions of their lives. He is a past “Advisor of the Year” for the National Social Security Association (NSSA), a certified NSSA educator and a subject matter expert for the organization’s accreditation panel.
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