Many people do not know about Social Security spouse benefits. There may be a good reason for this. There is no mention of spousal benefits in the Your Social Security Statement that the Social Security Administration is again sending out annually to people 60 and over.
Spousal benefits are important for just about everyone who is married or, in the case of divorcees, has been married for more than ten years. Spousal benefits provide additional income for families where one spouse does not qualify for benefits on their own record. If the person claiming spousal benefits waits until full retirement age (66 for most people claiming benefits now), the spouse will receive half the full retirement benefits of the working partner. Thus a family, where one person worked and the other did not, can receive 150% of the retirement benefit of the working partner (if they both claim at full retirement ages)
There are three aspects of the spouse benefit that are important to remember: (1) To claim a spousal benefit, the working spouse must claim their retirement benefit first. (2) Claiming a spousal benefit has no effect on the benefits received by the working partner. The working partner will still receive a benefit which will depend on when they claim their benefit. This benefit will increase every year between 62 and 70. (3) The size of the spousal benefit only depends on when the spouse claims a benefit. The spousal benefit will increase every year between 62 and full retirement age. Unlike the retirement benefit of the working partner, the spousal benefit does not increase after full retirement age so there is no reason to delay claiming spousal benefits beyond full retirement age.
These same general conditions apply to divorcees who have been married for ten years and are not presently married to someone else. A divorcee can claim a spousal benefit based on the earning record of their ex. Claiming a spousal benefit on the record of your ex will have no effect on their retirement benefit or, if they have remarried, the spousal benefit of their new spouse, Indeed, several people can claim benefits on the earnings record of one person, if that person has been married several times. The present spouse and every ex-spouse who was married to that person for ten years and is not presently married to someone else can claim a spousal benefit. Unlike the situation for a married couple, a divorcee does not have to wait for their ex to claim their retirement benefits before claiming a spousal benefit, but their ex has to be 62 before a spousal benefit can be claimed.
Spousal benefits can also increase the income of couples where both work. For a discussion of the strategies that duel earner couples can use to take advantage of the spousal benefit go to our discussion of Secret Strategies. We also provide a custom analysis for married couples so they can best exploit these strategies.