Social Security for Married Couples
Submitted by MIRUS Financial Partners on February 13th, 2017When you’re married, your claims to social security may extend to your spouse’s benefits. How and when you claim benefits may affect your spouse’s payout. So it’s important to understand all aspects of filing to ensure both you and your spouse maximize your benefits.
There are Three Types of Social Security Benefits
When you work and pay Social Security taxes, you're paying for three types of benefits: retirement, disability, and survivor's benefits.
Social Security Retirement Benefits
Retirement benefits are the cornerstone of the Social Security program. Even if other sources of retirement income are exhausted, Social Security retirement benefits can't be outlived. Many people qualify for benefits based on their own work record, but if you're married, you may also qualify based on your spouse's work record.
Social Security Disability Benefits
During your working years, you may suffer a serious illness or injury that prevents you from earning a living, potentially putting you and your family at financial risk. But if you qualify for Social Security on your earnings record, you may be able to get monthly disability benefits. You must have worked long enough in recent years, have a disability that is expected to last at least a year or result in death, and meet other requirements. If you're receiving disability benefits, certain family members (such as your dependent children) may also be able to collect benefits based on your work record. Because eligibility requirements are strict, Social Security is not a substitute for other types of disability insurance, but it can provide basic income protection.
Survivor's Benefits
You probably know the value of having life insurance to financially protect your family, but did you know that Social Security offers valuable income protection as well? If you're qualified for Social Security at your death, your surviving spouse (or ex-spouse), your unmarried dependent children, or your dependent parents may be eligible for benefits based on your earnings record. You also have survivor protection if you're married and your covered spouse dies and you're at least age 60 (or at least age 50 if you're disabled), or at any age, if you're caring for your covered child who is younger than age 16 or disabled.
Who Qualifies for Social Security Benefits?
Whether you work full-time, part-time, or are a stay-at-home spouse, parent, or caregiver, it’s important to be aware of these rules and to understand how time spent in and out of the workforce might affect your entitlement to Social Security.
When you work in a job where you pay Social Security taxes or self-employment taxes, you earn credits (up to four per year, depending on your earnings) that enable you to qualify for Social Security benefits. In 2017, you earn one credit for each $1,300 of wages or self-employment income. The number of credits you need to qualify depends on your age and the benefit type.
• For retirement benefits, you generally need to have earned at least 40 credits (10 years of work). However, you may also qualify for spousal benefits based on your spouse's work history if you haven't worked long enough to qualify on your own, or if the spousal benefit is greater than the benefit you've earned on your own work record.
• For disability benefits (if you're disabled at age 31 or older), you must have earned at least 20 credits in the 10 years just before you became disabled (different rules apply if you're younger).
• For survivor's benefits for your family members, you need up to 40 credits (10 years of work), but under a special rule, if you've worked for only one and one-half years in the three years just before your death, benefits can be paid to your children and your spouse who is caring for them.
How can you Calculate Your Social Security Benefits?
Your Social Security retirement benefit is based on the number of years you've worked and the amount you've earned. Your benefit is calculated using a formula that takes into account your 35 highest earnings years. If you earned little or nothing in several of those years, it may be to your advantage to work as long as possible, because you may have the opportunity to replace a year of lower earnings with a year of higher earnings, potentially resulting in a higher retirement benefit.
Your benefit will also be affected by your age at the time you begin receiving benefits. If you were born in 1943 or later, full retirement age (FRA) ranges from 66 to 67, depending on the year you were born. Your FRA is the age at which you can apply for an unreduced retirement benefit. However, you can choose to receive benefits as early as age 62, if you're willing to receive a reduced benefit. At age 62, your benefit will be 25% to 30% less than at FRA (this reduction is permanent). On the other hand, you can get a higher payout by delaying retirement past your FRA, up to age 70. If you were born in 1943 or later, your benefit will increase by 8% for each year you delay retirement.
For example, the following chart shows how much an estimated monthly benefit at a FRA of 66 would be worth if you started benefits 4 years early at age 62 (your monthly benefit is reduced by 25%), and how much it would be worth if you waited until age 70--4 years past FRA (your monthly benefit is increased by 32%).
Benefit at FRA Benefit at age 62 Benefit at age 70
$1,000 $750 $1,320
$1,200 $900 $1,584
$1,400 $1,050 $1,888
$1,600 $1,200 $2,112
$1,800 $1,350 $2,376
How do Spouse’s Earnings Affect Your Benefits?
What if you're married and qualify for spousal retirement benefits based on your spouse's earnings record? In this case, your benefit at full retirement age will generally be equal to 50% of his or her benefit at FRA (subject to adjustments for early and late retirement). If you're eligible for benefits on both your record and your spouse's, you'll generally receive the higher benefit amount.
One easy way to estimate your benefit based on your earnings record is to use the Retirement Estimator available on the SSA website. You can also visit the SSA website to sign up for a "My Social Security" account so that you can view your personalized Social Security Statement. This statement gives you access to detailed information about your earnings history and estimates for disability, survivor's, and retirement benefits.
Want to Learn More?
This is just an overview of Social Security. There's a lot to learn about this program, and each person's situation is unique. Contact a Social Security representative if you have questions.
For more information about Social Security benefits, visit the Social Security Administration website at www.socialsecurity.gov , or call (800) 772-1213 to speak with a representative. You may also call or visit your local Social Security office. Use the benefit calculators available on the Social Security website to estimate your future retirement, disability, and survivor's benefits.
• Check your earnings history regularly, and report any name changes right away to the SSA so that your earnings are recorded properly
• No matter when you apply for Social Security, you'll be eligible for Medicare at age 65, so make sure you contact the SSA three months before you turn 65 to sign up for Medicare even if you plan to retire later.