Social Security Spousal Benefits

Hi everyone. My name is Tan. I am an independent CERTIFIED FINANCIAL PLANNER™ practitioner. Today, I am going to talk about Social Security spousal benefits.

"Even if you have never worked under Social Security, you may be able to get spousal retirement benefits if you are at least 62 years of age and your spouse is receiving retirement or disability benefits. You can also qualify for Medicare at age 65 (1)."

"If you are divorced, you may still be able to get benefits on your ex-spouse's record (1)."

"If there is an ex-spouse who also qualifies for benefits, they will not affect the total amount of benefits you or your family may receive (1)." To put this into perspective, if you have multiple ex-spouses, the ex-spouses might qualify to get benefits on your record. The best way to check is for them to contact Social Security Administration directly.

"You can receive the spouse's benefit no matter what your age is if you are caring for their child who is also receiving benefits (1)."

For example, let's say the wife works and the husband stays at home to take care of the kids. When she retires, she gets $2,000 a month at full retirement age. The husband has never worked so he will get 50% of his wife benefit or $1,000 a month when he retires at full retirement age.

Two important things we should know about spousal benefit.
- First, if the husband takes spousal benefit before full retirement age, his benefit will be reduced.
- Second, it does not make sense to take spousal benefit after full retirement age because spousal benefit do not receive delayed retirement credits after full retirement age.

Here is a direct quote from Social Security Administration. "The maximum benefit for the spouse is 50 percent of the benefit the worker would receive at full retirement age (2)."

Let's continue with the example, if the husband’s full retirement age is age 66. Collecting at age 66 to 70, he will get $1,000 a month. If he collects at age 65, the benefit will be $920 a month, age 64 will be $830 a month, age 63 will be $750 a month, and age 62 will be $700 a month.

It is important to know that in-order for the husband to collect spousal benefit, the wife has already filed for her individual benefit.

Let's turn it up a notch. Please note that spousal benefit is different from individual benefit. Individual benefit is your benefit based on your earnings record. Spousal benefit is benefit based on your spouse earnings record.

So when and should you file for spousal benefit if you can?

When and should you file for individual benefit?

There is no right answer because everybody is different and there are a lot of moving components. Social Security benefits need to be calculated individually. I highly recommend talking to a professional to find the optimal strategy for you.

The key takeaway is to calculate your benefits and your spouse benefits at different age and project it out to future years.

Thank you for listening.

Until next time. This is Tan, your trusted advisor.

References
(1) - https://www.ssa.gov/planners/retire/applying6.html
(2) - https://www.ssa.gov/planners/retire/agereduction.html

This material is for educational use only and does not constitute tax, legal, or investment advice. Information may be changed or updated without notice. Consult with a licensed professional regarding your personal circumstances.

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