Spousal Social Security Benefits

May 19, 2023 | Planning Playbook

Spousal Social Security benefits provide financial support to married individuals who may not have earned enough Social Security benefits on their own, or have lower benefits compared to their spouse’s. In this video Tony Marquez, Vice President and Wealth Advisor at GreenUp Wealth Management, explains how these benefits work and discusses spousal benefit claiming strategies that can help married couples maximize their combined Social Security benefits over their lifetimes.

Hi, I’m Tony Marquez, Vice President and Wealth Advisor at GreenUp Wealth Management. 

Spousal Social Security benefits can certainly be complex. These benefits are designed to provide financial support to spouses who may not have earned enough Social Security benefits on their own, or have lower benefits compared to their spouse’s. The good news is that claiming spousal benefits does not affect the higher-earning spouse’s benefit amount. 

To be eligible for spousal benefits, you must be at least 62 years old and married to someone who is already receiving Social Security benefits. If you’re divorced but were married for at least 10 years and are currently unmarried, you may also be eligible for spousal benefits based on your ex-spouse’s work record. 

If you claim spousal benefits at your Full Retirement Age, you’ll receive the maximum spousal benefit, which is 50% of your spouse’s Full Retirement Age benefit. However, if you claim spousal benefits before reaching your Full Retirement Age, the benefit will be permanently reduced. If you’re eligible for both your Social Security benefits and spousal benefits, you’ll receive the higher of the two amounts, but not both benefits simultaneously. 

If your spouse passes away, you may be eligible for survivor benefits which can be up to 100% of your deceased spouse’s benefit, depending on your age and other factors. 

Let’s take a look at an example of how benefits would work for you and your spouse depending on when each of you apply for Social Security. Let’s assume your spouse was the higher earner who will receive $3,000 per month at Full Retirement Age. In this situation, your spousal benefit would be 50% of that amount, or $1,500. 

If you both apply at your Full Retirement Age, your spouse would receive $3,000 per month and you would receive $1,500 per month, and your combined monthly benefit would be $4,500 per month. The survivor benefit would be 100% of your spouse’s benefit, or $3,000 a month. 

If your spouse started benefits at Full Retirement Age and you stated benefits early at age 62, your benefits would be reduced from $1,500 per month to $975 per month, for a combined monthly benefit of $3,975. Your survivor benefit would still be the $3,000 per month, or 100% of your spouse’s benefit. 

If you both applied for benefits at age of 62, your combined monthly benefit would be $3,075, and your survivor benefit would be 100% of your spouse’s reduced benefit, or $2,100 per month. 

Finally, your spouse’s benefit would increase from $3,000 a month to $3,720 per month if they waited to apply at age 70, increasing your monthly benefit by $720 per month and increasing your survivor benefit as well. 

There are spousal benefit claiming strategies that can help married couples maximize their combined Social Security benefits over their lifetimes, but the best strategy will depend on each couple’s specific situation. 

Here’s an example: 

Let’s revisit the previous scenario, where the spouse is eligible for $3,000 per month at Full Retirement Age. Let’s assume that you were eligible for $500 per month at age 62 based on your own work history. You could apply for your $500 per month benefit when you turn 62 while your spouse waits until Full Retirement Age or later, and then switch to the higher $1,500 per month spousal benefit when your spouse applies for Social Security, giving you additional income while you wait for your spouse to begin benefits.  

There are no perfect strategies when it comes to claiming Social Security benefits because of life’s unknowns. Each couple’s ideal strategy will depend on factors such as age, work history, benefit amounts, health, and life expectancy. Speak with your GreenUp Wealth Advisor to determine the best strategy for maximizing your Social Security spousal benefits. 

I’m Tony Marquez. Thanks for watching! 

Author

  • Tony Marquez, CFP®

    Vice President | Wealth Advisor | Kansas City -- Tony is a Certified Financial Planner and has his master’s degree in Finance. Tony strives to be the expert, resource, and advocate that clients deserve when navigating a complex financial world. Prior to joining GreenUp Wealth Management in October of 2021, Tony worked as a Financial Advisor for a large financial services firm. There, he gained expertise in a variety of areas including financial planning, social security and retirement income strategies, college savings, and investment management.

Get a complimentary financial plan review

Working with GreenUp means getting conflict free advice from advisors who care. We’ll help guide you through your financial life so that your wealth works for you.

Interested in talking? You may be surprised at what is possible. Reach out to learn more.