How to Claim Social Security Spousal Benefits

By Matthew Frankel Markets Fool.com

One feature of Social Security is designed to boost the retirement income of married couples that only had one primary earner. Thanks to Social Security spousal benefits, even if one spouse didn't work at all, he or she may still be entitled to a substantial Social Security benefit on their spouse's work record. Here's how spousal benefits work, and how you can claim yours.

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What are Social Security spousal benefits?

There is a special rule in the Social Security program that is designed to provide additional retirement income to married couples where one spouse either didn't work, or earned comparatively little throughout their lifetime.

Stay-at-home parents are a common example of people who receive spousal benefits. Based on the formula for Social Security retirement benefits, an individual who didn't work for a Social Security-covered employer for at least 10 years would not be entitled to a retirement benefit. However, if their spouse is entitled to a benefit, they could still qualify for retirement income.

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Spousal benefits are an important feature of Social Security, and are currently collected by nearly 2.4 million spouses of retired workers. As of January 2017, the average spousal benefit is about $709 per month ($8,508 per year), so this can be a nice boost to the retirement income of married couples.

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It's also important to mention that divorced spouses can qualify for spousal benefits as well, as long as they are 62 or older, unmarried, and the marriage lasted for 10 years or longer. Remarried spouses generally cannot collect benefits on an ex-spouse's work record.

How much could you get?

As I mentioned, a spousal benefit is designed to ensure that a covered spouse's Social Security retirement benefit is at least one-half of the primary earner's benefit at full retirement age.

For example, let's say that both spouses of a married couple are turning 66 this year (the current full retirement age). We'll say that one spouse has a long and successful career, and is entitled to a Social Security retirement benefit of $2,000 per month. The other spouse was a stay-at-home parent for much of their adult life, only working part-time for a total of about 15 years, and is eligible for a benefit of just $400 per month based on their own work record.

In this case, a $600-per-month spousal benefit would be granted to the lower-earning spouse to make up the difference between their own retirement benefit, and half of the higher-earning spouse's benefit.

It's worth mentioning that there are a couple of things that could potentially lower your spousal benefit. For one thing, there is a limit to how much can be paid out based on any one person's work record, which varies from 150% to 180% of the full retirement benefit amount. So, if multiple people, such as the worker, a spouse, and a qualifying child, all draw benefits on the same person's work record, it's possible that the spousal benefit can be reduced. And if you receive a pension for work not covered by Social Security, your spousal benefit may be reduced.

Effects of early or late retirement

Just like with regular Social Security retirement benefits, a spousal benefit can be reduced if the beneficiary applies before his or her full retirement age. However, the percentages of the reduction are different for spousal benefits than they are for regular retirement benefits.

For early retirement, spousal benefits can be reduced by these percentages:

  • 25/36% per month (8 1/3% per year) for up to 36 months before full retirement age.
  • 5/12% per month (5% per year) beyond 36 months, as early as age 62.

Unlike normal retirement benefits, there is no increase for spouses delaying retirement beyond full retirement age. This rule can play a role in smart retirement planning, since a spousal benefit can only be given if the primary worker is also collecting their own retirement benefit. There are several variables that need to be considered, but it's rarely a beneficial strategy for the higher-earner to delay retirement beyond their spouse's full retirement age, if a spousal benefit is expected.

How to apply for a spousal benefit

Here's the easy part. There's no special spousal benefit application -- you apply for your own Social Security retirement benefit and a spousal benefit (if you qualify) at the same time. If your spouse is already receiving their Social Security retirement benefit when you apply, or if you both apply at the same time, the SSA will automatically check your eligibility for a spousal benefit. If you do, your retirement benefit application will also request your spousal benefit.

There are three ways you can apply for Social Security benefits -- online, by phone, and in person at your local Social Security office. The online application is available here, and is designed to be completed in about 15 minutes. There's nothing to sign, and no further documentation is typically needed.

Of course, you can always apply by phone (1-800-772-1213), or in person at your nearest Social Security office. You can find your local office here, and while you can simply walk in, calling ahead (same number as the phone application) and making an appointment is highly recommended, as wait times can get rather long.

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