Married (or once married) taxpayers have several Social Security benefit options. Those include:

• Retirement Benefits based on your own earnings record.
• Spousal Benefits based on your spouse or ex-spouse’s earnings record.
• Survivor Benefits based on your deceased spouse or deceased ex-spouse’s earnings record.
• Disability Benefits based on your own earnings record.

Both Survivor and Disability Benefits have circumstances where you can file for benefits without regards to your current age. However, it matters how old you are when you file for both Spousal and Retirement Benefits.

Retirement & Spousal Benefit Credit and Reduction

Congress has defined full retirement age as a precise age in both years and months based on your birth year. Full retirement age starts at age 65 for those born in 1938, is age 66 for birth years between 1943-1954 , and is age 67 for those born in 1960 and later. Between those ranges, it gradually increases by a few months for every birth year . For example, if you were born in 1958, your full retirement age is 66 and 8 months.

If you file before your full retirement age, your Retirement or Spousal Benefits are impacted by up to a 30% reduction.

If you file after your full retirement age, your monthly Retirement Benefits are increased by delayed retirement credits, although your Spousal Benefits remain the same. Delayed retirement credits are calculated by a different formula based on birth year and most commonly result in a credit of 8% per year that you delay.

Prior to 2015 , the Social Security Administration permitted a strategy where you could file for Spousal Benefits at full retirement age while also delaying benefits based on your own earnings record to let them grow. Alas, now retirees are governed by the “Deemed Filing” rules which means that when you file for either Retirement or Spousal Benefits, you are assumed to have filed for your other benefit type as well.

Spouse’s Affect on Spousal Benefits

Your spouse’s filing behavior does not have an affect on the size of your Spousal Benefit. You do not get delayed credits if your spouse files for Retirement Benefits late. Your Spousal Benefits are not reduced if your spouse files for Retirement Benefits early.

Your Spousal Benefit is limited to 50% of your spouse’s full retirement age benefit. Your own early filing can diminish your Spousal Benefit, but you are not afforded delayed retirement credits from late filing.

Spouse’s Affect on Survivor Benefits

Your Survivor Benefits are limited first by your late spouse’s Retirement Benefit.

This means that if your spouse files early and predeceases you, your survivor benefit would be reduced to, in most cases, the reduced benefits your spouse was receiving.

If your spouse delayed filing and predeceases you, your survivor benefit would benefit from the delayed retirement credits.

If your spouse was older than full retirement age but died before filing, your Survivor Benefit is determined based what benefit the late spouse would have been entitled to had he or she filed in the month of death.

If the spouse was younger than full retirement age and died before filing, your Survivor Benefit is based on their primary insurance amount. Primary insurance amount or PIA can be thought of as a person’s 100% full retirement benefit with no credit or reduction.

This is why we say that the breadwinner’s earnings record is the record which will be used throughout both of your lifetimes. Regardless of who the survivor is, one of you will be receiving that larger benefit throughout your joint lives.

Survivor Benefit Credit and Reduction

If you file for survivor benefits at or after your own full retirement age, then you receive 100% of your Survivor Benefit.

However if you file earlier, you are subjected to the widow(er)’s limit based on the age when you are filing. That limit ranges from 71.5% at age 60 to 100% at or after full retirement age . There is no delayed filing credit for Survivor Benefits.

Additionally, “Deemed Filing” rules do not apply to Survivor Benefits. This means that you can file for Survivor Benefits at full retirement age while delaying your own Retirement Benefits.

General Principles

While Social Security can feel like a black box, it is actually a complex but repeatable algorithm. With a complete view of the Social Security Administration’s data, all of the possible benefits available to you can be calculated.

And in fact, this is what we do as a part of our our Social Security Planning bonus service. If you are a client of ours, feel free to follow the steps in “How to Obtain Your Social Security Statement and Full Earnings Record” to get started.

If you are not a client of ours, you can remember one main thing from this article:

In a stereotypical couple of a breadwinner and a homemaker, the family typically is better off if the breadwinner delays Social Security filing until age 70 when the maximum delayed retirement credits is achieved. Regardless of who the survivor is, one of you will be receiving that larger benefit throughout your joint lives.

Additionally, if the homemaker’s benefits are smaller than 50% of the spouse’s PIA, then they benefit from filing for Spousal Benefits at full retirement age. Spousal Benefits receive no delayed retirement credits. If however the homemaker’s benefits are larger than 50% of the spouse’s PIA, then I’d recommend optimizing your Social Security Plan. There are many resources available to perform that calculation. We are just one of them.

Photo by Hector Reyes on Unsplash. Image has been cropped.