Considerations for Your Spouse When You Claim Social Security
Copyright © 2015 AARP
You may know how timing your collection of Social Security affects your own bottom line. But the issue of timing is even bigger than that. You and your spouse could face decisions on when to collect benefits that could affect your household for many years. This refers to benefits that go to a dependent spouse, based on a breadwinner’s work record, and benefits that go to a survivor after the breadwinner dies.
Women are more vulnerable than men to poverty in old age, so these decisions may be of great consequence to many wives, but the same principle applies to everyone: Choices on when to begin Social Security benefits could have a lasting impact on you and your spouse’s financial well‐being.
If you’re eligible for Social Security as a dependent spouse, you face a real choice about when to begin benefits. You may claim this benefit if you have reached 62 and your partner has begun collecting retirement benefits. But your own spousal benefit is reduced for each month you claim it before you’ve reached your own full retirement age.
At your own full retirement age, your spousal benefit can be 50 percent of the breadwinner’s full retirement benefit. But if you don’t wait, and you claim it as early as 62, it’s reduced significantly.
By the way, if you’ve established your own earnings record with Social Security, that could change things. In that case, your payment is the greater of the benefit you’ve earned yourself or the amount you qualify for as a dependent spouse.
Based on today’s full retirement age of 66, claiming the spousal benefit early reduces benefits by about 8 percent at 65, 17 percent at 64, 25 percent at 63, and 30 percent at 62. Suppose your spouse has begun collecting his or her full retirement benefit of $1,000 per month. If you wait until you reach 66, you get $500 per month. If you start as soon as possible, at 62, you get about $350. Check here for more details on what the spousal benefit means to you, and how your amount is affected by when you claim it.
Social Security’s rules can give married couples potentially lucrative choices. For example, a higher‐earning spouse may file for benefits at full retirement age but officially suspend them, a maneuver that opens the door for the partner to begin spousal benefits. Meanwhile, the higher earner waits to begin collecting an enhanced, delayed benefit at 70.
Social Security applies a monthly reduction rate to spousal benefits taken before full retirement age. The rate is 25⁄36 of 1 percent per month for each of the first 36 months before full retirement age, and 5⁄12 of 1 percent for each month before then.
If a dependent spouse starts collecting before reaching his or her full retirement age, the amount is reduced. But unlike some benefits, it doesn’t work the opposite way: Social Security provides no “bonus” for waiting past full retirement age. The upper limit of a dependent spouse benefit is 50 percent of the benefit that would go to the breadwinner at full retirement age. (The breadwinner can’t push the spousal amount higher by delaying collection of benefits past his or her own full retirement age.)
A spouse who has reached full retirement age will get 50 percent of the breadwinner’s full retirement benefit, even if the breadwinner begins collecting before full retirement age.
Check out the monthly reductions that affect spousal benefits taken by a dependent spouse before reaching full retirement age. It also shows that the monthly reductions differ, based on year of birth.
|Year of Birth||Normal or Full Retirement Age||Number of Reduction Months||Amount||Reduction||Amount||Reduction|
|1937 or earlier||65 years||36||$800||20%||$375||25%|
|1938||65 years and 2 months||38||$791||20.83%||$370||25.83%|
|1939||65 years and 4 months||40||$783||21.67%||$366||26.67%|
|1940||65 years and 6 months||42||$775||22.5%||$362||27.5%|
|1941||65 years and 8 months||44||$766||23.33%||$358||28.33%|
|1942||65 years and 10 months||46||$758||24.17%||$354||29.17%|
|1955||66 years and 2 months||50||$741||25.83%||$345||30.83%|
|1956||66 years and 4 months||52||$733||26.67%||$341||31.67%|
|1957||66 years and 6 months||54||$725||27.5%||$337||32.5%|
|1958||66 years and 8 months||56||$716||28.33%||$333||33.33%|
|1959||66 years and 10 months||58||708||29.17%||$329||34.17%|
|1960 and later||67 years||60||700||30%||$325||35%|
These figures are based on a $1,000 primary insurance amount.
Your decision about when to collect benefits also has a major effect on the amount of Social Security you leave behind for a surviving widow or widower. If you die, your spouse (at his or her full retirement age) can get 100 percent of your benefit. That means the bigger a benefit you wait to receive, the more you leave your surviving spouse.
You could look at it this way: A retirement benefit you claim at 70 is 76 percent more than what you get if you start at 62. That much larger benefit is what you could leave a surviving spouse, who may rely on it for a long time.
Widows and widowers also face timing decisions. They can collect their survivor benefit as early as 60, but with a substantial reduction. (This is meant for aged widows and widowers who are not disabled or raising children — factors that allow for earlier eligibility.) Generally, it will cost the surviving spouse about 30 percent of the benefit to take it at 60, when compared to waiting until full retirement age.
Social Security offers a lot of material online about survivor’s benefits and other categories of benefits.