Claiming Social Security early? Here's how spousal benefits come into play

Claiming Social Security before full retirement age can trip up some people when it comes to spousal benefits.

For starters, not all early filers can access those benefits right away, and even those who do may discover it doesn’t translate into a bigger monthly check.

“A lot of folks get confused about the spousal benefit,” said David Freitag, a Social Security expert and financial planning consultant with MassMutual. 

Part of the reason is that the rules applying to spousal benefits for anyone born after Jan. 1, 1954, were changed under 2015 legislation.

“That’s when all of the creative filing went away for younger [beneficiaries],”Freitag said.

While it can seem complicated, two things to remember about spousal benefits in general are:

1. It is capped at 50% of the benefits your husband or wife would get at their full retirement age, and;
2. You cannot qualify for those benefits unless your husband or wife is already receiving Social Security.

It’s also important to note that if your spouse dies, you would file for survivor benefits, not spousal benefits. (More on that farther below.) And if you were born before that 1954 cutoff date, you may have other strategies available to you as a spouse.

You may know that your own Social Security benefits are reduced if you claim them before your full retirement age, which currently is either 66 or 67, depending on your birth year. (Likewise, claiming anytime beyond that age means your benefits would be higher, growing by 8% yearly until you reach age 70.)

About 69% of the 43.7 million retired workers in 2018 received reduced benefits due to tapping them before their full retirement age, according to the Social Security Administration. The earliest you can file for benefits is age 62.

However, your early filing would impact any spousal benefits you qualify for, as well, Freitag said.

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And that’s regardless of whether your husband or wife claimed early or waited until full retirement age (or later).

The amount of the reduction is greater the earlier you claim.

For example, say your spouse’s monthly benefit at full retirement age is $2,000, so 50% — the maximum you could qualify for if you were to wait to file — is $1,000.

If you decide to claim Social Security at age 62, your spousal benefit would be $650, or 35% less, said certified financial planner Peggy Sherman, a lead advisor at Briaud Financial Advisors in College Station, Texas.

Also keep in mind that you would not get both the benefit from your own record and the spousal benefit — you’d get the higher of the two. Using the above scenario: If your monthly benefit at age 62 would be less than $650, you’d get $650. If your benefit were more, you’d get no spousal benefit.

You also don’t need to file an extra application to see if spousal benefits would give you a monthly boost — you are automatically deemed to be applying as a spouse, as well.

If you have no work record to qualify on, you can get spousal benefits with the same 50% maximum applying.

Additionally, if your husband or wife claimed beyond full retirement age — which means their benefits would have continued growing — the 50% maximum is applied to the full-retirement-age amount, not the spouse’s higher benefit.

Meanwhile, if your spouse is not already receiving benefits and you are applying for yours early, you don’t qualify for spousal benefits — yet.

When your spouse does file, you would be eligible for spousal benefits. However, because you filed early, you still wouldn’t be entitled to the full 50%.

“The spousal benefit would still be reduced because you claimed early,” Sherman said.

In other words, the only way to be eligible for the full 50% of the full-retirement-age spousal benefit is to wait until your own full retirement age — and that holds true even if your spouse filed early, Sherman said.

If you are divorced and the marriage lasted at least 10 years, you can claim on your ex-spouse’s record if you have not remarried. The same 50% maximum would apply — if that share is more than your own benefits when you file, you’d get the higher amount. (And, no, it has no impact on your ex’s benefits.)

Meanwhile, if your spouse passes away, you would be eligible for survivor benefits, which are generally 100% of what your wife or husband had been receiving. If the amount is more than your monthly payments, you’d get the higher amount.