Social security benefits are an important part of financial planning for many of the baby boomers right now. Understanding more about social security and spousal benefits can come in handy.
There are certain circumstances where you might be eligible to receive spousal benefits that you might not be aware of. Keep reading to learn more about what social security spousal benefits are, eligibility and how much you can expect to receive.
What Are Spousal Benefits?
If someone dies their social security benefits might become available to their current spouse or their former spouse if they have not re-married. Even when there is no death a spouse or ex-spouse can collect Social Security spousal benefits that are equal to half of what the spouse receives if the amount is higher than you would get with your own benefits.
Eligibility
If you are currently married or have been married for over 10 years and have not remarried then you are both eligible for spousal benefits. In order to file for benefits or to qualify to receive spousal benefits, you have to be at least 62 years old. Keep in mind if you wait until you are 67 (full retirement age) you will maximize your benefit and receive your full amount.
According to Justin Kimball from Preszlerlaw-ns.com, you don’t have to be married to your partner to qualify for spousal benefits, but you usually need to be living together. You also have to wait until your spouse files for their own benefits first.
If it’s an ex-spouse you do not have to wait until your ex-spouse files for their own benefits. The ex-spouse does have to be at least 62 years of age though.
How Much?
Social Security benefits are based on your own earnings record. For spousal benefits, they will be 50% of the amount of your spouse’s Social Security benefit that is calculated at their full retirement age (67 years old).
Sometimes people believe they can collect both their own social security benefits and their spousal benefit at the same time, but this is not the case. You will receive the one that is larger of the two but not both at the same time.
If the person collecting is a widow then he/she will collect survivor benefits equal to 100% of the deceased spouse’s social security benefit. Also, it is important to note that if your spouse passes away, you are eligible to receive spousal benefits from the age of 60 without a penalty.
If you decide to file for spousal benefits between the age of 60 and normal retirement age the amount you receive will shrink between 71% to 99%. If you can hold off to apply for social security spousal benefits until the full retirement age of 67, it is best and makes the most sense financially. If you have lost your social security card, you can apply for a replacement social security number online.
Married Couples
For those that are married that can’t afford to put off receiving social security benefits for whatever reason, there is a strategy to help you maximize how much you receive over the long term.
Whichever spouse earned less over their lifetime will have to file for social security benefits when they turn 62. The spouse that earned more will wait until they are 70 to file because this is the maximum benefit age to receive everything.
Between 62-70 the spouse with the higher income will have benefits that will continue to grow in those eight years. When the spouse with the higher income turns 70 and applies for their benefits then that spouse can drop the spousal benefits and collect the larger benefit amount and have the other spouse collect the spousal benefit for the larger amount as well.
Over time this will be the way to get the most money out of spousal benefits and social security benefits. If in between those eight years one spouse passes away the smaller social security benefit amount will also die off and the larger one will come into play.
Deceased Ex-Spouse
If your ex-spouse is deceased and you have not re-married you can collect your spousal benefits. Because they are deceased you will be able to collect 100% of the benefits instead of just 50%.
As soon as you turn 60 years old you can apply for the benefits and start collecting the money that you have the right to.
Extra Tips
If you have been married and divorced a few times, you can choose which spouse you want to collect your spousal benefits on. It doesn’t have to be your most recent ex-spouse.
If your benefit is higher then you can push collecting yours at the max age of 70 and collect on their benefits in the meantime. This will allow you to collect much more after you turn 70. Delaying benefits by a few years will make a noticeable difference.
If you will be applying for benefits on your ex-spouse’s account then you will have to show proof of your divorce decree and a copy of your marriage license. If you are worried that your ex will have to pay something for you collecting on their spousal benefits, no worries because this will not cost your ex any money. It will not affect what they are entitled to either.
Feeling Like a Pro?
Now that you know more about spousal benefits and questions like “when can a spouse claim spousal benefits?” you are well informed whether you or your spouse qualify or not. This will help you plan for the near future if you are nearing retirement age.
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