For many married retirees, Social Security plays a critical role in planning their retirement budgets. According to an annual Gallup survey, almost 90% of retirees say that Social Security constitutes at least a secondary source of family income. It is therefore crucial to make the most of the benefits available to ensure optimal well-being during the golden years.
A relevant aspect of Social Security benefits intended for married couples are spousal benefits. These allow the spouse to claim benefits based on their partner’s income history, providing the possibility of a significant increase in household income.
How Are Social Security Spousal Benefits Calculated
The amount of spousal benefits is calculated as a percentage of the retirement benefit of the spouse who is employed, varying depending on the age at which such benefits are applied for. For those spouses who choose to claim benefits before they turn 67, the percentage is lower than for those who do so after this age.
For example, let’s consider a spouse with a full retirement benefit of $3,000. If you decide to claim benefits at age 62, the spousal benefit would be $1,500. However, if you put off applying until age 67, the spousal benefit would increase to $2,250.
This increase is due to the fact that Social Security benefits increase progressively with age. At age 62, the full retirement benefit is equal to 70% of the average lifetime monthly earnings, while at age 67 it reaches 100%.
Consequently, if you are considering applying for Social Security spousal benefits, it may be beneficial to wait until age 67 to get the maximum benefit possible.
How Much Can You Receive in Social Security Spousal Benefits?
To be eligible for marital retirement benefits, a couple of conditions must be met, to ensure that the applicant is effectively eligible for it. First, you and your spouse must have been married for at least one year, with your spouse currently receiving Social Security retirement or disability benefits.
Additionally, you must be at least 62 years old. (Alternatively, caring for your spouse’s child under 16 or disabled automatically qualifies you, regardless of your age.)
If eligible, you may be entitled to a benefit amounting to up to 50% of your spouse’s primary insurance amount (PIA). The PIA represents the monthly benefit your spouse would receive at their full retirement age (FRA).
FRA, however, is not a static concept. It hinges on your spouse’s birth year. For instance, if your spouse was born between 1943 and 1954, their FRA is 66. For those born after 1954, it progressively increases, reaching 67 for individuals born in 1960 or later.
We explain how the different percentages work, according to the conditions met in each case:
- At age 62: 32.5% of the spouse’s PIA.
- At age 62: 35% of the spouse’s PIA.
- At age 64: 37.5% of the spouse’s PIA.
- At age 65: 41.67% of the spouse’s PIA.
- At age 66: 45.83% of the spouse’s PIA.
- From age 67: 50% of the spouse’s PIA.