June 8, 2015

Social Security Spousal Benefits

Written by Jason Hiley

Most Americans look forward to claiming their own Social Security benefit in retirement.  Did you know that if you are married, you may also be eligible for a spousal benefit?  Spousal benefits are Social Security benefits available based on your spouse’s earnings record while s/he is still alive.

 (Men and women are both eligible for spousal benefits.  For the sake of simplicity, the husband will be referred to as the higher wage earner.)

Spousal Benefit

At full retirement age (FRA-66 for those born between 1943-1954), the Social Security spousal benefit is equal to 50% of your spouse’s primary insurance amount (PIA).  You can claim the spousal benefit as early as 62, but the monthly benefit amount will be reduced to 35% of your spouse’s benefit.   The reduction is gradually phased out as the spouse claiming a spousal benefit nears FRA.

Age   of Wife Husband’s   Benefit Amount Percentage   Eligible Spousal   Benefit Amount Annualized   Spousal Benefit Amount
62* $2,000 35% $700 $8,400
63* $2,000 37.5% $750 $9,000
64* $2,000 41.7% $834 $10,008
65* $2,000 45.8% $916 $10,992
66 $2,000 50% $1,000 $12,000

 

*When a person claims a spousal benefit before full retirement age, she is deemed to have filed for her own worker’s benefit as well as her spousal benefit.  This locks in the monthly benefit amount for her own worker’s record, therefore making her ineligible for delayed retirement credits.

In order for a wife to claim Social Security spousal benefits, her husband must have applied for his own Social Security benefit. If her husband still wishes to delay taking his Social Security benefit, he can utilize the file and suspend strategy as explained here. Please note that only one spouse is allowed to claim a spousal benefit at any given time.

Consult a Professional 

Unfortunately, most people make Social Security decisions without consulting a professional.  You may be surprised to learn that the Social Security office is not allowed to give advice on strategies that would help maximize your potential benefit.  An expert in Social Security planning can take into account variables such as your current age, life expectancy, and financial assets in order to help you identify an election planning strategy best suited to maximize your lifetime Social Security benefit.

Don’t miss out on tens if not hundreds of thousands of dollars in lifetime Social Security benefits by making an uninformed decision.  Call or email us today to arrange a time to discuss your unique situation.

Learn more about Hiley Hunt Wealth Management and who we serve in Omaha, NE – Financial Planning and Investment Management