If you are married or divorced and aged 62 or older, you may be eligible to receive your spouse’s social security benefits. However, just because you are eligible does not mean you have to claim them. Applying for spousal social security benefits before reaching full retirement age (FRA) can have certain financial implications.
A study conducted by Mass Mutual in 2024 revealed that the average retirement age for Americans is 62. At age 62, many individuals are eligible to receive a portion of their spouse’s social security benefits, whether the spouse is alive or deceased. But how much can one receive? Is it financially advisable to claim benefits early?
When a worker applies for social security benefits, their spouse may be eligible to receive benefits based on the worker’s earnings record.
Qualifying for spousal benefits comes with certain conditions and limitations. As a spouse, you can only receive half of the primary insurance amount (PIA) at full retirement age. If you apply early, the amount will be reduced.
According to the Social Security Administration (SSA), if you are eligible for retirement benefits based on your own earnings that are higher than the spousal benefits, you will receive your own benefits instead. If the spousal benefits are higher, SSA will pay you the spouse’s PIA benefits, but not both.
As a spouse, if your work history is not enough to qualify for individual social security benefits, you can still be eligible for spousal benefits. According to SSA rules, you need at least 40 social security credits to qualify, earning up to four credits per year through paying social security taxes, requiring ten years of contributions.
Furthermore, you must have been married for at least one year, and your spouse must be 62 or older for you to claim spousal benefits, with exceptions in certain cases.
As per SSA rules, if you are caring for a child under 16 or a disabled child of the spouse, you are eligible for spousal benefits at any age.
According to the National Council on Aging, after a divorce, you are eligible to receive benefits provided that the marriage with your ex-spouse lasted for at least ten years. When applying for benefits, you must remain unmarried. The minimum age to apply is 62.
Even though your ex-spouse must be at least 62 for you to apply, there is no obligation to start receiving benefits, just being eligible is enough.
Regardless of the terms in the divorce decree, you can receive social security spousal benefits without your ex-spouse being informed.
The timing of applying for spousal benefits is crucial. For those born in 1959 or earlier, the full retirement age is 66; for those born in 1960 or later, it is 67.
If you are eligible for social security benefits, you must apply for your own benefits first before applying for spousal benefits. Remember, your spousal benefits are 50% of the spouse’s PIA.
However, if you apply for spousal benefits at 62, the benefit amount will be permanently reduced, with the reduction dependent on the number of months you claim benefits before reaching full retirement age.
According to SSA regulations, in the 36 months leading up to full retirement age, benefits decrease by 1% of 25/36 per month, roughly a 0.69% reduction monthly. After 36 months, there is an additional decrease of 1% of 5/12 per month, about a 0.42% reduction monthly.
For example, Mara is eligible for spousal benefits with her husband’s PIA being $2,000 per month. Mara can receive 50%, which is $1,000 per month.
Mara’s full retirement age is 66, and she decides to start receiving spousal benefits at 62, which is 48 months early.
By calculating the reduction of 1% per month for 25/36, her benefits will decrease by 25%, approximately 0.69% each month.
However, the reduction amount is smaller in the final 12 months before 66.
The reduction in the last 12 months is 1% of 5/12 per month (around 0.42%). When these reductions are added, Mara’s spousal benefits will be reduced by 30% from the original $1,000.
This decreases her spousal benefits from $1,000 to $700 per month, a permanent amount that may slightly increase annually based on cost-of-living adjustments.
If you are considering early spousal benefits and want to see the calculation percentage, you can consult the SSA’s spousal social security benefits calculator online.
If you are married and contemplating social security benefits, it’s wise to discuss your spousal benefits with a social security expert. Scheduling a detailed consultation at the Social Security Administration is highly recommended.
This is particularly crucial if you have disabled children under 16. If you are divorced and meet the criteria, you can apply for your ex-spouse’s social security benefits.
Your eligibility for benefits depends on your PIA, with both parties ensured to receive the higher amount.
If you plan to claim benefits before reaching full retirement age, careful consideration is necessary as it may have long-term financial implications.