Being married could work to your advantage when it comes to Social Security. That’s because you may be eligible for two sets of benefits in your household.
But being married could also make filing for Social Security a bit more complicated. There are certain types of benefits that are available to people by virtue of being married, and it’s important to understand the rules behind them. Here are three critical Social Security rules every married couple in retirement needs to know.
Image source: Getty Images.
1. You can’t claim a spousal benefit until your spouse signs up for Social Security
If you’re married, you may be eligible for spousal benefits from Social Security. This holds true even if you’re able to collect benefits based on your own work record.
Social Security’s spousal benefits are meant to provide financial support to married people who have no lifetime earnings or lower lifetime earnings, often because they stayed out of the workforce or worked minimally in order to be caregivers.
If you didn’t work at all and aren’t eligible for Social Security on your own, you could still get a spousal benefit check each month. If you worked part-time and therefore earned very low wages, you can collect a spousal benefit if that monthly payment is higher than the benefit you’re entitled to based on your own earnings record.
But one thing you should know is that if you’re married, you’re not allowed to sign up for spousal benefits until your spouse claims Social Security. For this reason, it’s important to discuss when your spouse plans to file for benefits if you’ll be reliant on that money for retirement income.
2. There’s no financial incentive to delay a spousal benefit
If you’re eligible for spousal benefits from Social Security, you should know that they have a maximum value. And it’s 50% of your spouse’s benefit at their full retirement age.
You can collect your spousal benefit without a reduction as long as you wait until your full retirement age, which may or may not be the same as your spouse’s, depending on what year you were each born in. But once your full retirement age arrives, you shouldn’t hesitate to start getting spousal benefits if you can.
When you’re claiming Social Security based on your own earnings record, there’s a huge incentive to delay benefits past full retirement age. Each year you wait, until you turn 70, gives your benefits an 8% boost.
But spousal benefits cannot be boosted. So there’s no incentive to delay your claim once you’ve reached full retirement age.
3. Claiming early when you’re the higher earner could impact your spouse’s survivor benefits
If you’re the higher earner in your household, the timing of your claim matters a lot — not only in terms of your immediate income, but in terms of potential survivor benefits.
The lower-earning spouse in a married couple is typically entitled to Social Security survivor benefits if the higher-earning spouse dies. Those are worth 100% of the monthly benefit the higher earner is entitled to while they’re still alive.
As the higher earner, if you claim Social Security ahead of full retirement age, your monthly benefits will be reduced — and so will your spouse’s survivor benefits. That could be a huge problem if you don’t have a lot of retirement savings and you pass away well ahead of your spouse.
Clearly, there’s a lot to know about Social Security if you’re married. And while it’s good to have different options, figuring out when to file can be tricky. That’s why it’s so important to weigh your choices carefully and jointly with your spouse. Running through different scenarios and discussing things together could help you land on a strategy that serves both of you well.
