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Social Security: Understanding Spousal Benefits – Married Couples

Understanding Social Security spousal benefits is important for all spouses so that they can be sure to receive all the Social Security benefits for which they may be eligible. This article touches on spousal benefits for married couples. Future articles will tackle this issue in the context of divorced spouses and surviving spouses.

In order for married individuals to qualify for spousal benefits, their spouses must have already filed to receive Social Security on their own work record. Assuming a full retirement age (FRA) of 66, at age 62, you can claim 35% of your spouse’s Primary Insurance Amount (“PIA”).An individual’s PIA is the amount he or she is eligible to receive at FRA. If you wait until age 66 to claim, you would receive 50% of your spouse’s PIA. Spousal benefits do not earn delayed retirement credits. There is no benefit to waiting beyond your FRA to claim spousal benefits.

As explained above, your spousal benefit is a percentage of your spouse’s PIA. What determines the percentage you receive is the age at which you apply for the benefit, not the age at which your spouse applies for Social Security based on his or her own work record. Therefore, if your spouse claims his or her own Social Security benefit at age 62 and you wait until FRA to apply for spousal benefits, you will receive 50% of your spouse’s PIA. If your spouse applies for his or her maximized Social Security at age 70, and you apply for spousal benefits at FRA, you will still only receive 50% of your spouse’s PIA.

It is important to understand Social Security’s “deeming provision.” This provision states that anytime you apply for a benefit prior to reaching your FRA, you are applying for both your own work record benefit (if you have one) and a spousal benefit based on your spouse’s work record. Social Security will look at both benefits and pay you only the larger of the two.

Individuals born prior to January 2, 1954, have options for claiming spousal benefits that those born later do not have. For these individuals, the “deeming provision” ends at FRA. This means that once they reach FRA, and their spouse has filed for his or her own Social Security benefit, they can file a “restricted application” for only spousal benefits. This allows their work record benefit to earn valuable delayed retirement credits of 8% per year until age 70 while they collect spousal benefits from FRA until age 70.

For individuals born on or after January 2, 1954, the “deeming provision” extends beyond FRA. Accordingly, any time they apply for benefits, they are applying for both benefits simultaneously, and Social Security will only pay the larger of the two.

Be certain you understand Social Security spousal benefits and the strategies that may be available to you and your spouse. By understanding these rules, you can ensure that you are maximizing the Social Security benefits available to you and your spouse.

Stifel does not provide legal or tax advice. You should consult with your legal and tax advisors regarding your particular situation.