Social Security's rules about claiming spousal retirement benefits are many and complicated. Spousal benefits are those taken by a person who is either married now or was married for at least ten years. Those people can collect Social Security benefits from their spouses' earnings records. This would typically occur if the spouse has a much higher Social Security retirement benefit. At retirement, a person can claim either 100% of their own benefit or 50% of the spouse's benefit, whichever is higher.
What To Know
Before deciding when to take spousal benefits, here are three critical things to know, courtesy of The Motley Fool.
1. Claiming too soon can cost you a substantial amount of money. You can claim spousal benefits as early age 62. But doing so can drastically reduce your monthly benefit. Once incurred, the reduction in benefits is permanent and irreversible.
2. Claiming too late can also cost you money. The Social Security spousal benefit is capped at 50% of the spouse's benefit. Waiting past the full retirement age to begin collecting will not increase your retirement check. Waiting will only cost you benefits you would otherwise have received.
3. If the spouse you are trying to collect benefits from has not filed for his or her own retirement benefits, you are out of luck. The spouse must first apply before she can. (If, however, you have been divorced for at least two years, this does not apply.) This can really complicate things. If she is doing well, for example, and wants to wait to apply for Social Security retirement benefits, but you are struggling, things could get tense.
Get Plenty Of Good Advice Before Making A Move
Deciding how and when and in what order to collect Social Security retirement benefits is hard. It is a financial decision that will affect you every month for
the rest of your life. So, think carefully. Consult with a financial planner. Try some of the online calculators. Only once you are sure you are making the best decision, should you apply for spousal retirement benefits.
For more on maximizing Social Security spousal retirement benefits, read this excellent article from Charles Schwab.