In my most recent blog post, I gave a brief overview of the beginnings of Social Security and some factors that affect the decision of when to claim. The key factors that we explored were health, availability of other assets, spousal benefits, and risk tolerance, however, for those who are or have been married there are more options and benefits of which you should be aware.
Spousal Benefits. The primary rule on spousal benefits is that, if you are married, you can claim the higher of your benefit or half of your spouse’s benefit. There is a penalty for claiming before your full retirement age (FRA), whether you will be claiming on your benefit or on your spouse’s. You may remember from Part I of this blog series that you will be rewarded with an increased benefit if you delay claiming beyond your FRA, however, this is not the case if you will be claiming on your spouse’s record. If your increased benefit at age 70 is less than half of your spouse’s benefit at their FRA, it does not make sense to delay claiming after your FRA. However, you cannot claim on your spouse’s record until they claim on their own and you need to have been married for at least one year.
Survivor Benefits. Once one spouse passes away, the surviving spouse keeps the higher of their own benefit or the deceased spouse’s benefit. For this reason, a common strategy in deciding when to initially claim social security retirement benefits is to have the person with the higher benefit wait until 70 to claim so that the highest possible single benefit will have been achieved. This strategy only works as long as there is enough cash flow to allow the delay in claiming. In the below example, if Adam and Alice can delay Alice claiming her benefit until age 70, the surviving spouse will retain the monthly benefit of $3,779.14 (adjusted for inflation). If they both claim at FRA, the surviving spouse will have a monthly benefit of $3,000. To be eligible for the survivor benefit, you must have been married for at least 9 months before your spouse passed away. Also, you can receive benefits as early as age 60. There is no benefit to waiting past your FRA to claim the survivor benefit.
| Age | Adam’s Monthly Benefit | Alice’s Monthly Benefit | |
| 62 | $ 1,610.00 | $ 2,100.00 | |
| 63 | $ 1,725.00 | $ 2,250.00 | |
| 64 | $ 1,840.00 | $ 2,400.00 | |
| 65 | $ 1,993.41 | $ 2,600.10 | |
| 66 | $ 2,146.59 | $ 2,799.90 | |
| FRA | 67 | $ 2,300.00 | $ 3,000.00 |
| 68 | $ 2,484.00 | $ 3,240.00 | |
| 69 | $ 2,682.72 | $ 3,499.20 | |
| 70 | $ 2,897.34 | $ 3,779.14 |
Divorced Spousal Benefits. If you are divorced, you can claim on your ex-spouse’s record if you meet certain criteria: you must have been married to them for at least 10 years, been divorced for at least 2 years, and are currently unmarried. If you have more than one ex-spouse, you can choose on whose record to claim as long as you meet the previous requirements. Similar to the spousal benefit, you can receive half of their full retirement age benefit and if you claim on their record before you reach your FRA, the benefit is reduced. Also, you will not be rewarded with a higher benefit if you claim beyond your full retirement age. Unlike the spousal benefit, your ex-spouse, on whose record you are claiming, does not need to claim on their own record first.
In addition to these situations, there are special rules for the caretaker of a dependent child (or dependent parent), divorced survivor benefits, taxation on Social Security benefits if you are still receiving wages, and it doesn’t end there. There are many things to consider when deciding when to claim Social Security and each person and situation is unique. The Wealth Advisors at Legacy Trust are a great resource to help you navigate the ins and outs of Social Security; please feel free to utilize their expertise.
Danielle Parmenter, CFP®
Associate Wealth Planner
