Spousal Social Security Benefits: 3 Things All Retired Couples Should Know

Many retirees collect Social Security benefits based on their own work record, with their monthly payment equal to a percentage of their average wages over the highest-earning 35 years of their career. Some people don't do that, though. Some collect spousal benefits instead.

Spousal benefits are available based on a spouse's work record, and you can collect them if you are married or if you have divorced after a marriage lasting at least 10 years (and not remarried). These spousal benefits can be a critical source of income for people who didn't earn a ton of money in their own paychecks, but there are a lot of nuances to how they work that can affect the amount of income they bring in.

Since spousal benefits could be critical to helping support you in your later years, there are three things every couple needs to know about them.

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1. Spousal benefits can equal up to 50% of the primary earner's benefit

The first thing to know is that spousal benefits can be worth a lot of money. You could receive up to 50% of your husband's or wife's standard benefit if you claim Social Security spousal benefits.

The key, though, is "up to." You could shrink the amount of spousal benefits you collect if you claim before your Full Retirement Age. So, although you become eligible to start these payments at 62, doing so would shrink them considerably.

It's also worth noting that if you delay longer than your FRA, you do not increase spousal benefits by earning delayed retirement credits. This works differently than if you claimed Social Security retirement benefits on your own work history.

If you are getting your own retirement benefits, you increase them by 2/3s of 1% per month for each month you wait beyond FRA until 70. But delayed retirement credits cannot be earned on spousal benefits, so there's no real benefit in waiting beyond your FRA to claim them -- provided you're eligible to start at that time.

2. You can't claim your spousal benefits until your spouse has claimed their retirement benefits

The next key thing that you need to know is that even if you are entitled to spousal benefits, you can't just claim them whenever you want. You have to be at least 62, for one thing, unless you have a qualifying child in your care. You also must wait until your spouse whose work record the benefits are based on claims their own retirement benefits.

Say, for example, that you are a wife and you are claiming benefits on your husband's work record. You're ready to start your checks, but your husband is still working and hasn't claimed his own Social Security retirement benefits yet. Unfortunately, you are out of luck when it comes to claiming. You'll have to wait.

Now, you can claim your own retirement benefits if you are eligible for them based on your work history. This is a common strategy -- the lower-earning spouse starts their own retirement benefits ASAP to enable the higher earner to delay and boost the amount that comes in. Then, the lower earner claims spousal benefits later on when their partner eventually starts receiving checks. But that will work for you only if you actually qualify for benefits based on your own career.

If you don't, you'll simply have to wait -- and perhaps rely more on income from retirement plans like a 401(k) or IRA until your spouse is ready to start their own retirement payments. It's important to take this into account during your retirement planning so you and your spouse can coordinate a strategy that works.

3. You don't get to choose which benefits you're claiming

Finally, it's also worth noting that when you file for benefits, you don't get to choose which ones you are claiming. Thanks to deemed filing rules, you're considered to be automatically applying for both spousal and retirement benefits when you apply for either. This means you can't be strategic and, say, apply only for spousal benefits while letting your own benefit grow.

You can't double-dip and get both benefits, either. You get the higher amount, but you only get one or the other. It's important that any married person claiming Social Security understands these three facts so they can work with their spouse to make the right decisions about who claims benefits when.

Developing a sound strategy allows you to bring in more Social Security income so you can rely less on 401(k), IRA, or other retirement account distributions and ensure you have the maximum amount of guaranteed benefits coming in throughout your later years.

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