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Most people earn their Social Security benefits in retirement by working for a good number of years and paying into the system. Specifically, you need to accumulate 40 work credits to qualify for Social Security benefits. And you can only earn a maximum of four credits per year, which means you need to spend at least 10 years holding down a job in some capacity.
But that’s not the only way to qualify for Social Security. If you’re not eligible for Social Security on your own, you may be eligible for spousal benefits. Those could give your retirement income a nice boost, especially if you don’t have a lot of savings to rely on.
If you’re planning to sign up for spousal benefits from Social Security, it’s important to understand the rules involved. Here are three things to know before you file.
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1. If you’re married, you can’t sign up before your spouse
It’s not just married people who are eligible for Social Security spousal benefits. If you’re divorced, you may be entitled to those benefits as well.
In that case, you generally do not need to wait until your former spouse claims Social Security to sign up for spousal benefits. However, if you’re married, the rules are different.
In that case, you can’t claim Social Security spousal benefits until your husband or wife signs up. So if they’re planning to delay their Social Security claim, that’s something to talk about, since it could impact you.
2. If you’re planning to wait until age 70 to file, don’t bother
When you’re filing for Social Security based on your own earnings record, there’s a huge incentive to delay your claim past full retirement age. For each year you do, until you turn 70, your monthly benefits get an 8% boost.
But while waiting until age 70 to claim your own benefits could make them higher, it’s not a good strategy for Social Security spousal benefits. And the reason is that spousal benefits max out at 50% of what your spouse is entitled to at their full retirement age.
You can collect your Social Security spousal benefits in full once you arrive at your full retirement age. But if that age is 67, which is the case if you were born in 1960 or later, then there’s no sense in waiting a minute beyond that point.
3. If your own benefit is higher, a spousal benefit won’t do you any good
Social Security spousal benefits are available to you even if you worked and are eligible for retirement benefits based on your own earnings record. But one thing you can’t do is double dip on Social Security.
If your own monthly benefit based on your wage history is smaller than what you’d get in Social Security spousal benefits, then claiming spousal benefits makes sense. But if your own monthly benefit is larger, then there’s no sense in claiming spousal benefits.
Social Security will only pay you one set of monthly benefits at a time. So if you’re eligible for $1,400 a month based on your wage history or a $1,450 spousal benefit, you’ll get the $1,450. But you can’t get $2,850 a month by combining both benefits.
Make sure you’re in the know
There are a lot of important things to know about how Social Security spousal benefits work. So if you think you’ll be claiming them, make sure you understand the rules ahead of retirement.
Also make sure to talk about Social Security filing strategies with your spouse, whether you’re looking at claiming spousal benefits or not. It’s important to get on the same page so you can maximize that vital income stream together.
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