With awareness of Social Security benefits increasing, many people are starting to say “OK, OK, I get it, the longer I wait to collect benefits, the larger they’ll be.” But if you’re married (or even if you WERE married), spousal benefits add a whole new wrinkle to the picture (and most of us Boomers don’t want to see any more wrinkles than we have to!). So let’s take a cursory look at spousal benefits.
Spousal benefits equal to 50% of the other spouse’s Primary Insurance Amount (their benefit) are the benefits a person can claim at or after their Full Retirement Age with a restricted application. This allows them to continue delaying their own benefits to earn Delayed Retirement Credits. When people apply for benefits, they are deemed to be applying for both their own benefits and their spousal benefits, if available, and will receive the higher of the two unless they restrict their application to just their spousal benefits. Spousal benefits do not increase while the spouse earns DRCs so delaying after FRA has no extra benefit.
Supplemental Spousal Benefits
Supplemental spousal benefits are available to a person 62 years and older who is the spouse of someone currently receiving or eligible to receive benefits. This holds true even if the spouse never worked a Social Security qualifying job (i.e. homemaker). Supplemental spousal benefits are the benefits a spouse receives added to one’s own benefit. SSA tracks each component separately and applies different reduction formulas if the spouse claims benefits before FRA. If the spouse is under FRA, the supplemental spouse benefit will be permanently reduced by as much as 30% for someone whose own FRA is 66 and begins spousal benefits at 62. Their own benefits will be permanently reduced by as much as 25%.
If an individual is divorced, he/she may be entitled to benefits on the former spouse’s earnings. The individual must meet certain criteria. If they remarry, they will lose the benefit of the former spouse, at least until the second marriage ends either in death or divorce. In this situation they may be able to claim the best benefit option between the two former spouses. Individuals can receive one half of the benefits of a former spouse, but only one former spouse. Ex-spouse benefits equal spousal benefits and supplemental spousal benefits. If married for more than 10 years and divorced for more than 2 years and your spouse reached age 62, you can apply for ex-spouse benefits even if your ex-spouse has not filed. Your ex-spouse benefits have no effect on your ex-spouse’s own benefits or family maximum, and your ex-spouse doesn’t even need to be informed. Additionally, unlike spouses, ex-spouses can each file and suspend when they reach FRA and then apply for ex-spouse benefits allowing their own benefits to earn DRCs.