The Spousal Benefit Option for Social Security Benefits

There is a provision in the Social Security system that many people don’t know much about – the spousal benefit.  This benefit is applicable when one spouse has had little or no working history, such as a stay at home mom or dad, and the other spouse has had a working career that has provided enough quarters of earnings to make him or her eligible for Social Security retirement benefits.

Note – to simplify the explanations, from this point forward we’ll refer to the lower-earning spouse as “spouse” and the higher-earning spouse as “worker”.

This benefit option allows the spouse to choose a potentially greater benefit than the one based on his or her own earnings record – equal to ½ of the benefit of the worker.  Specifically, if the spouse has earnings that represent a PIA (Primary Insurance Amount) that is less than ½ of the worker’s PIA, a spousal benefit amount is added to the spouse’s benefit to increase the amount of the benefit to ½ of the worker’s PIA.

So, if the spouse has a PIA of $1,100 and the worker has a PIA of $2,450, an amount would be added to the spouse’s benefit to increase the PIA to $1,225, ½ of the worker’s PIA.  The ½ benefit is provided if the spouse has filed for benefits at FRA (Full Retirement Age).  If filing for the spousal benefit at age 62, the spousal benefit will be equal to 35% of the worker’s PIA.  At any age after 62 but before FRA, the amount will be pro-rated.

Qualifications

There are several qualifications and factoids that you need to understand about the spousal benefit:

• the spouse and the worker must have been married for at least 12 months (continuously) immediately prior to applying for benefits.
• the spouse must be age 62 or older.
• the worker must be eligible for benefits, meaning that the worker must file for benefits with Social Security.  The worker does not have to be actually collecting benefits, he or she could be utilizing the “file and suspend” option.
• the spousal benefit does not include any credits that the worker may be eligible for upon delaying receipt of benefits, as the spousal benefit is based upon the worker’s PIA, not the actual benefit the worker may receive.
• there is no increase in spousal benefit by delaying application after FRA of the spouse.
• if the spouse has reached FRA and would like to delay receiving his or her own retirement benefit, the full spousal benefit will be available to the spouse until he or she files for his or her own benefit.
• if the spouse continues to work while receiving benefits, the same earnings limits apply to the spousal benefits as would apply to primary worker benefits.

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 Jim Blankenship, CFP®, EA, is an expert in personal retirement, IRAs, and tax issues, with more than 25 years of experience in the industry. Read more from this author