Many individuals contribute to Social Security throughout their professional lives, becoming eligible for benefits upon retirement. However, if you haven’t had a job, you might think that Social Security benefits are not available to you. However, when it comes to claiming Social Security spousal benefits, it’s advisable to enroll at your full retirement age (FRA). Delaying beyond this point may not offer any financial advantages.
Contrary to that assumption, there are potential avenues for you to explore. If you are married to someone who qualifies for Social Security retirement benefits, you may be eligible for spousal benefits based on their earnings record. Additionally, if you were previously married to someone who meets these criteria, you may be able to claim spousal benefits based on your ex-spouse’s record.
When Delaying Offers No Advantages in Social Security
When it comes to filing for Social Security benefits based on your own earnings record, there’s a clear advantage in delaying your claim beyond your Full Retirement Age (FRA). Every year you wait, up to age 70, results in an 8% permanent increase in your monthly benefit.
However, the landscape changes when we talk about spousal benefits. Unlike individual benefits, there are no potential boosts waiting for you. Once you reach your Full Retirement Age, you’re entitled to your full spousal benefit, which amounts to 50% of your current or former spouse’s eligible benefit. Unfortunately, delaying your claim won’t increase this benefit, so there’s no reason to forego money you’re entitled to receive.
It’s worth noting that if you decide to file for your spousal benefit before reaching your Full Retirement Age, you can expect a reduction in that benefit. The same principle applies if you’re claiming Social Security based on your own earnings record. You are permitted to start receiving Social Security benefits as early as age 62, but doing so before your Full Retirement Age will mean accepting a reduced monthly payment for the rest of your life.
However, it’s crucial to reiterate that there’s no financial incentive to delay a spousal benefit claim beyond your Full Retirement Age. So, if your Full Retirement Age is, for instance, 67 (which applies to those born in 1960 or later), that’s the optimal age to commence receiving your spousal benefits.
What is a Social Security spousal benefit?
Social Security spousal benefits are a part of the U.S Social Security program that provides retirement income to spouses who may not have earned enough Social Security credits on their own to qualify for a decent benefit.
A retired worker’s current spouse qualifies for Social Security spousal benefits once that spouse turns 62, as long as their partner (the retired worker) is receiving retirement or disability benefits. Similarly, a retired worker’s former spouse qualifies for spousal benefits at age 62 if the marriage lasted 10 or more years and the ex-spouse is unmarried. If the divorce occurred two or more years ago, an ex-spouse can begin collecting spousal benefits even if the person they were married to hasn’t started receiving retirement benefits.
The maximum spousal benefit is 50% of the other spouse’s full benefit. If your own work history earns a higher benefit, you’ll receive that amount rather than the spousal benefit.
Understanding the Regulations
Social Security is a complex program with a multitude of regulations. While delving into the rulebook may not sound particularly exciting, it becomes increasingly crucial as retirement approaches. Familiarizing yourself with how Social Security operates is vital, as a lack of knowledge could lead to significant errors, such as unwarranted delays in claiming spousal benefits, driven by misinformation.
It’s worth noting that even if you qualify for Social Security benefits based on your own earnings history, you might still be eligible for a spousal benefit if it results in a higher monthly payment for you. However, it’s important to understand that you cannot simultaneously receive both your personal benefit and a spousal benefit. You are entitled to only the higher of the two.