The Spousal Benefit Rule That Caps Your Social Security Check at 50% of Your Spouse’s
Claiming Social Security spousal benefits follows a completely different set of rules than filing on your own record, and ignoring one key deadline could cost you money you can never get back.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
One of the most important financial decisions you might have to make for retirement is figuring out when to claim Social Security. You can collect your monthly checks without a reduction once full retirement age (FRA) arrives, which is 67 if you were born in 1960 or later. But there are other filing ages to look at, too.
If you’re claiming spousal benefits from Social Security, though, the rules are different. And in that case, you don’t have as many options as you’d get for claiming benefits based on your own earnings record.
Social Security spousal benefits come with a maximum payout
When you’re claiming Social Security based on your own wage history, your monthly benefits are reduced if you file ahead of FRA. But if you delay your claim past FRA, your benefits can grow.
Each year you hold off on Social Security past FRA boosts your benefits by 8%. And while that incentive runs out at 70, if your FRA is 67, you have an opportunity to boost your checks by 24%.
But if you’re claiming Social Security spousal benefits, the rules are different. And one thing you don’t want to do is delay a spousal benefit claim past your FRA.
If you don’t wait until FRA to file for spousal benefits, those checks will be reduced. But once your FRA arrives, you might as well sign up. That’s because spousal benefits are not eligible for delayed retirement credits like benefits claimed on your own earnings record.
The maximum Social Security spousal benefit you can get is 50% of your spouse’s FRA benefit. So let’s say your spouse is entitled to $2,000 a month at their FRA. If your spouse delays Social Security until age 70, their benefit will grow to $2,480 per month.
But in that situation, you can’t get more than $1,000 in spousal benefits. If you delay your spousal benefit claim until 70, you’ll get the same $1,000 monthly benefit you would’ve received by filing at FRA. So there’s truly no sense in waiting.
In fact, Social Security will only pay up to six months of benefits on a retroactive basis. If you delay a spousal benefit claim too long, you could end up in a situation where you permanently forfeit benefits you could’ve had.
Your benefit could still grow
Now one thing you should know is that like regular benefits, Social Security spousal benefits are eligible for a cost-of-living adjustment each year.
So let’s say you start out with a $1,000 monthly spousal benefit. As those annual raises come through, your benefits should increase to keep pace with inflation. But that’s not the same thing as growing your benefits by filing later, which simply won’t do anything for you.
Make sure you know the rules
Social Security is a complex program. And the rules of claiming spousal benefits can be even more complicated.
That’s why it’s important to read up on Social Security ahead of retirement. Understanding the ins and outs could give you a better idea of when to sign up and what monthly benefit to expect.
Contact [email protected] for any questions or corrections.