In 2024, around 68 million Americans will receive Social Security checks, a crucial part of financial stability for many. Nearly 90% of retirees depend on Social Security, with about 60% viewing it as a major income source, according to a 2023 Gallup poll.
While retirement benefits are well-known, spousal benefits also play a significant role but are less understood. Here’s what you need to know about spousal benefits, including eligibility, potential amounts, and other important details.
Your Own Social Security Benefits and Eligibility
To qualify for spousal benefits, you must be married to someone eligible for retirement or disability benefits. Even if you haven’t worked or haven’t worked enough to qualify for retirement benefits based on your own work history, you can still receive Social Security benefits as a spouse.
However, if you qualify for retirement benefits based on your own work history, it might affect the amount you receive or your eligibility for spousal benefits altogether.
Maximum Spousal Benefit
The maximum spousal benefit is 50% of your spouse’s full benefit amount at their full retirement age (FRA). If your own retirement benefit at your FRA is higher than this amount, you won’t qualify for spousal benefits. If it is lower, you will receive the higher of the two amounts.
To get the full spousal benefit, you must wait until your own FRA to file. Claiming early, as early as age 62, results in a permanently reduced amount. Your spouse must also be collecting benefits before or at the same time as you.
Working in Retirement and Benefit Reduction
Continuing to work while claiming benefits can reduce the monthly amount you receive. This reduction is due to the retirement earnings test, which imposes an income limit to determine how much of your benefits will be withheld due to earnings from a job.
For example, if you are 65 years old with an FRA of 67 and earn $25,000 per year from a job, your benefits will be reduced by approximately $112 per month. However, once you reach your FRA, the Social Security Administration will recalculate your benefits to account for the amount previously withheld due to your earnings, and if you continue to work, you won’t be penalized.
Divorce Benefits for Retirees
Divorced individuals can also qualify for spousal benefits under certain conditions:
You must not be currently married.
You and your former spouse must have been married for at least 10 years.
You must be at least 62 years old, unless you are caring for a child who is under 16 or disabled.
You must wait to file until your ex-spouse begins claiming benefits unless you have been divorced for at least two consecutive years.
Like spousal benefits, the maximum payment you can receive is 50% of your former spouse’s full benefit amount. Claiming divorce benefits does not impact your ex-spouse’s benefits, even if they have remarried.
Understanding Social Security spousal benefits can help you maximize your income in retirement. Whether you are still married or divorced, knowing the eligibility criteria and potential benefits can make a significant difference. Always consider how working, filing age, and your own retirement benefits might affect the amount you receive.
With careful planning, you can make the most of your Social Security benefits to ensure financial stability in your retirement years.
FAQs
Can I receive both my own and spousal benefits?
No, you will receive the higher amount of the two.
Will working after reaching FRA affect my benefits?
No, once you reach FRA, working will not reduce your Social Security benefits.
Do spousal benefits increase if I delay filing past my FRA?
No, unlike personal retirement benefits, spousal benefits do not increase if you delay filing past your FRA.
Can I claim spousal benefits if my spouse is not yet receiving benefits?
No, your spouse must be receiving benefits for you to qualify for spousal benefits.
Are divorce benefits available if my ex-spouse remarries?
Yes, your eligibility for divorce benefits is not affected by your ex-spouse’s remarriage.