Social Security Spousal Rule: Social Security provides significantly more in America than just retirement benefits.
Among its main components is security for non-working or lower-earning spouses of individuals who get their retirement benefits. The program gives qualifying spouses benefits even if they have never worked, therefore avoiding putting these people in danger of financial instability.
While this component of Social Security will always exist, a significant feature of its operation will change significantly, doing away with a tactic that former recipients frequently employed to increase their payments. This article explains the workings of the spousal benefit, how it is evolving, and what you may do to adjust to the new Social Security environment.
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The Social Security payment at age 70 often exceeds the spousal benefit the claimant received at age 62 because benefits climb from age 62 to age 70 by as much as 8% annually. This approach could give couples the best of both worlds.
Sadly, the rule was altered in 2024, except for anyone who was born before January 2, 1954. Spouses will now only be eligible to get the greater of their spouse’s benefit or their working benefit, depending on when they file.
How to Be Eligible
The amount that the Social Security Administration pays will always be the greater of your prospective spousal benefit or your work-based benefit. If you are eligible for a retirement benefit based on your work record, the SSA will theoretically pay it to you first.
Your payment will be augmented to a greater amount if that amount is less than what you are entitled to under the spousal benefit.
To receive a spousal benefit, you have to be:
- 62 years of age or older
- Taking care of a disabled or under-16-year-old child and
- Possess a spouse who has submitted a Social Security claim
You will receive half of your spouse’s full benefit if you wait to file until you reach your full retirement age, which is 67 for anyone born in 1960 or later. Your benefit will be permanently decreased even if you file as early as age 62.
As long as you were married for ten years or more, you are still eligible for spousal benefits even after being divorced.
Ways To Optimize Future Gains
Regardless of whether the change in the spousal rule affects you, it always pays to have a well-thought-out Social Security claiming strategy. As a spouse who is not employed or makes less money, you can increase your future benefits in the following ways:
Make the most of your earnings while you can
Making as much money as you can from wages that are liable to Social Security taxes is the best approach to increasing your own Social Security benefits. In the long term, you will gain more from Social Security if you can qualify for a benefit that is greater than 50% of your spouse’s benefit since your lifetime payout will be higher.
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Send in your work as soon as you can, but no later than 67
Avoid filing at age 62 if you plan to use your spousal benefit to increase your lifetime Social Security benefits. If you file at your full retirement age, this will permanently cut your benefit by around 30%. But, since your benefit won’t increase until you reach full retirement age, you shouldn’t wait until after age 67 either.
If you were born before January 2, 1954, keep your best claim approach
For people born before January 2, 1954, the guidelines governing spousal benefits remain unchanged. If such is the case for you, you can still apply for spousal benefits at age 62, and if you’d like, you can change to benefits based on your work record at age 70.
