Spousal Benefit Amounts: How does SSA figure it out?

Spousal Benefit Amounts: How does SSA figure it out?

The current or previous spouse will receive the Social Security benefits when the husband or wife dies, though it always depends on certain circumstances. But you can still collect a Social Security spousal benefit even if there’s no death that occurred. You can collect the spousal benefit equal to half of what your spouse gets as long as it’s higher than what you can get on your own. 

Spousal Benefit Eligibility

Both current and ex-spouses have eligibility for the spousal benefit. If you are an ex-spouse, you should have not remarried and should have been married for over 10 years. To file or receive a spousal benefit, you must be of age 62 or until you are at full retirement age. You will maximize your benefit by waiting for the age of 67 but that’s depending on when you were born.

You must wait until your spouse files for their own benefit if you are a current spouse. For ex-spouses, different rules apply. As long as your ex-spouse is at the age of 62 or older, and even if your ex-spouse hasn’t filed for his or her own benefits, you can still receive a spousal benefit.

How much can you get?

As calculated at your spouse’s full retirement age, or FRA, you can collect 50 percent of the amount of your spouse’s Social Security benefit, or based on your own earnings record you can claim a Social Security benefit. The one with the higher amount upon Social Security’s calculation will be the one you will receive. Since FRA depends on the year of birth, you should check the Social Security website to determine it. 

Let’s say you were born on or before January 1, 1954, you can choose once you reach your FRA that filing a restricted application is the only way you can receive the spousal benefit. If you will do this, your benefits can continue to grow but you will delay receiving your retirement benefits based on your own earnings record. This option is no longer available if you were born any later than January 1, 1954.

How can benefits be affected with early retirement

Unless you are in a situation in which you are caring for a qualifying child, your benefit will be permanently lower if you begin collecting a spousal benefit before you reach your FRA. This is just like losing a part of your own benefit when you are retiring early. Your benefit will be reduced by as much as 35.6% depending on how early you had your retirement. By putting in various early retirement ages on the website of the Social Security Administration, you can get the exact percentage. 

Both you and your spouse should consider the long-term effects carefully if either of you are considering taking the Social Security benefits early. You will have permanently reduced the survivor benefit and will significantly reduce the benefits that may be paid out over your lifetime for either of you who will be eligible. 

When and how married couples should collect the benefits should be coordinated and agreed upon by both parties. If you want to see how it works, you can use an advanced Social Security calculator and run these numbers yourself. 

What if you will become a widow or widower?

You can collect a survivor’s benefit as early as 60 years old -- if your spouse dies. If you have reached FRA, you will be eligible for the full amount of the deceased’s benefit or the maximum benefit. Depending on how much over 60 you are, the benefit will be reduced by 71.5%-99% before you reach FRA.

Restricting the application to file for either your own benefit or your survivor’s benefit and switching to the other amount later is possible for if you are either a widow or a widower. If your widow benefit is lesser than your own benefit amount at the age of 70, you have the option to do this. You can switch at the age of 70 to your own benefit but you could claim the widow benefit for several years before doing so. 

There are more benefits that can be collected for workers who delay collecting their Social Security until they reach the age of 70. The benefit will act as a powerful form of life insurance when married couples will choose to maximize the higher-earning person’s benefit by delaying. In order to optimize the survivor and spousal benefit, married couples should work together in making decisions.

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