Understanding Social Security Spousal Benefits
Social Security spousal benefits provide financial support for individuals who may not have earned significant income during their careers, often due to caregiving or part-time work. These benefits are designed to ensure that spouses, including lower earners, can still receive income in retirement. The spousal benefit can be as much as 50% of the higher-earning spouse’s benefit at their full retirement age (FRA)[1], but there are strategic decisions to make about when to claim benefits to maximize lifetime income.
How Spousal Benefits Work
To qualify for spousal benefits, a lower-earning spouse must be at least 62 years old, and their higher-earning spouse must have already filed for Social Security. If one chooses to take the spousal benefit at full retirement age, the benefit equals 50% of the higher earner’s FRA benefit. However, if claimed before full retirement age, the spousal benefit is reduced[2]. Notably, if the lower earner qualifies for benefits on their own work record, they can claim their own benefit first and later switch to the higher spousal benefit when their partner begins Social Security. For most people, whether you choose to take your own benefit or the spousal benefit, it makes sense to wait until your full retirement age, however, there are some scenarios where that is not the case.
An Example with Jonathan and Kasey
Let’s consider Jonathan and Kasey:
- Kasey, the higher earner, was born in 1965 and will receive $3,000 per month at FRA, but plans to wait until age 70 to maximize her payout.
- Jonathan, the lower earner, was born in 1970 and qualifies for $1,200 per month at his FRA. Jonathan plans to take his benefits at age 62.
Scenario 1: Jonathan Claims Early
If Jonathan begins taking his benefits at age 62, he will receive a reduced benefit of 70% of $1,200, which equals $840 per month. For the next eight years, until Kasey turns 70 and begins claiming benefits, Jonathan will collect $840 per month. When Kasey claims at age 70, Jonathan switches to the spousal benefit, which is based on 50% of Kasey’s FRA benefit ($3,000) minus a reduction for taking his benefit early (see the chart in the footnotes). After switching to the spousal benefit, Jonathan receives $930 per month. Assuming Jonathan lives to 85, this would be a total lifetime benefit of $242,640.
Scenario 2: Jonathan Waits Until FRA
If Jonathan waits until his FRA (67) to claim benefits, he will receive his full benefit of $1,200 per month. When Kasey turns 70 and begins claiming her benefits, Jonathan will switch to the spousal benefit, which is 50% of Kasey’s FRA benefit ($1,500). Because he waited until FRA, there is no reduction in his spousal benefit. The total lifetime benefit in this scenario is $16,560, favoring an FRA filing rather than taking benefits early. However, if Jonathan was 7 years younger than Kasey, claiming his benefits early then switching to the spousal benefit when Kasey filed at age 70 would result in an increased lifetime benefit of nearly $10,000.
Key Takeaways Waiting to claim spousal benefits often leads to higher lifetime benefits, particularly for couples who delay Social Security to maximize the higher earner’s payout. However, personal circumstances—such as age, financial needs, health, and longevity—should factor into the decision. Consulting with a financial advisor can help ensure the best strategy for your unique situation.
[2] SSA Spousal Benefit Reduction Chart
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