Most taxpayers are aware of the retirement benefits of the Social Security system. However, perhaps one of the greatest benefits of the entire program, the spousal benefit, is not as well-known.
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The spousal benefit provides for lifelong retirement payouts to eligible spouses, even if they never worked a day in their entire lives. However, as with any governmental program, there are a number of rules and regulations that you’ll have to know in order to maximize your benefit.
Here’s a look at some of the most important characteristics of the Social Security spousal benefit that you may not be familiar with.
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Your Spousal Benefit May Be Larger Than Your Own Personal Benefit
If you only work a part-time job or have large gaps in your employment history, you may not think that you’ll be entitled to much from Social Security once you retire. However, if you’re married, you might end up receiving more than you could imagine.
If you wait to file for a spousal benefit until full retirement age, which is 67, your Social Security benefit will be the larger of your own qualifying benefit or 50% of your spouse’s benefit.
For example, if your spouse is entitled to a $3,500 monthly payout from Social Security, you can claim a $1,750 monthly benefit once you reach full retirement age. Since the average Social Security benefit for most workers in December 2023 was $1,710.78, it’s possible that your spousal benefit will exceed the amount of your personal benefit.
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If Your Spouse Claims Benefits Early, Your Payout Will Suffer
The amount a beneficiary receives from Social Security depends on both their work record and when they file.
Although full retirement age is now 67 for most workers, you can file a claim to start benefits as early as age 62. However, your benefits will be permanently slashed by as much as 30%.
In other words, if your full retirement benefit is $2,000 per month at age 67, by filing at age 62, that monthly amount will drop to just $1,400.
A spouse’s Social Security benefit is directly tied to the payout that the primary beneficiary receives. Thus, if your spouse files for benefits at age 62, your own spousal benefit will be permanently reduced as well.
Rather than receiving 50% of your spouse’s full retirement age benefit of $2,000, or $1,000 per month, you would only receive $700, or 50% of your spouse’s reduced $1,400 payout.