If you’re like millions of Americans, you’re counting on Social Security as an important source of income during your retirement years. This makes it critical to plan carefully for how you can maximize your Social Security benefits when you retire.
One common mistake made by many married couples when planning the role of Social Security in their retirement finances is failing to consider strategies that can maximize their combined benefits. Also, many people aren’t aware that widows and widowers may be entitled to their spouse’s Social Security benefits after their spouse dies.
Claiming Options for Spouses
Planning strategies to maximize Social Security starts with understanding each spouse’s options for claiming benefits. Both current and ex-spouses (if the marriage was for longer than 10 years and the ex-spouse didn’t remarry before age 60) at least 62 years of age may be eligible to receive spousal benefits.
When you become eligible to receive Social Security, you can either claim benefits based on your own earnings history or claim half of your spouse’s benefits if this amount is higher, assuming your spouse has filed for benefits first. This is often the case if one spouse earned significantly more money than the other over his or her working career.
Note that claiming a spousal benefit will not reduce the amount of your spouse’s or ex-spouse’s Social Security benefits. Also, you can’t receive your Social Security benefits and a spousal benefit — it’s one or the other.
If you or your spouse did not pay enough money into Social Security to qualify for your own benefits, you can receive benefits based on the earnings record of the spouse who does qualify to receive benefits. To be eligible, you must have been married to a qualifying spouse for at least one year or be the parent of a qualifying spouse’s child.
If you have reached full retirement age (FRA), you’ll receive 50 percent of your qualifying spouse’s primary benefit amount. However, if you are at least 62 years old but haven’t yet reached FRA, you’ll receive less than this amount on a permanent basis.
In order for you to receive spousal benefits, your qualifying spouse must have either started collecting Social Security benefits or reached FRA and suspended benefits before April 30, 2016.
Benefits for Surviving Spouses
Social Security survivor benefits are available to anyone whose spouse has died if the marriage was for at least nine months. These benefits may be claimed at age 60, or age 50 if you become disabled before or within seven years of your spouse’s death. They can be claimed at any age if you have eligible children.
Your survivor benefits are based on the primary benefit amount of your deceased spouse on the date that he or she dies (including delayed retirement credits). If you start receiving survivor benefits before you reach FRA, they will be reduced permanently by a fraction of a percentage for each month until you reach FRA.
Note that if you’re at least 62 years old and your own Social Security retirement benefits are more than your survivor benefits, you can switch and start receiving your retirement benefits instead. But you can’t receive both benefits at the same time.
Also, if you remarry before you turn 60 (or 50 if you’re disabled), you aren’t eligible to receive survivor benefits as long as you remain married to your new spouse. But if you remarry after you turn 60 (or 50 if you’re disabled), you will be eligible for survivor benefits based on your deceased spouse’s work record.
Talk to Your Financial Advisor
The details regarding Social Security spouse and survivor benefits can be complex and confusing. Therefore, it’s often a good idea to speak with a financial advisor about your specific situation.
Please give us a call if you’d like to discuss Social Security spouse and survivor benefits further.