Social Security benefits for retired workers, spouses and survivors: 4 things married couples must know

Social Security is generally the most important source of income for older Americans. But benefits for spouses and survivors are commonly misunderstood. In a recent survey, MassMutual identified the following knowledge gaps among adults nearing retirement:

• 25% of respondents incorrectly marked this statement as false: "If I have a spouse, he or she can receive benefits from my record even if he or she has no individual earnings history."
• 30% of respondents incorrectly marked this statement as true: "If I have a spouse and he or she passes away, I will receive both my full benefit and my deceased spouse's full benefit."
• 41% of respondents incorrectly marked this statement as false: "If I get divorced, I might be able to collect Social Security benefits based on my ex-spouse's Social Security earnings history."

Even small misunderstandings can lead to substantial amounts of lost income. Here are four things married couples need to know about Social Security benefits.

1. Spouses can claim Social Security on their retired partner's work record

Social Security retirement benefits are available to retired workers and spouses, even if those spouses have no work record. In that situation, spouses can claim Social Security on the work record of their retired partner, provided the following conditions are met:

• The spouse must be at least age 62.
• The partner must be receiving Social Security benefits.
• The couple must be married for at least one year.

Some individuals will be eligible for Social Security as a retired worker and a spouse. Those individuals will automatically receive the larger payout when they claim Social Security. Spouses cannot collect both types of benefits, nor can they temporarily claim spousal benefits while delaying retired worker benefits to get a bigger payout.

To elaborate, retired workers who claim Social Security after full retirement age earn delayed retirement credits that increase their benefit by two-thirds of 1% per month, or 8% per year. Delayed retirement credits stop accumulating at age 70, so it never makes sense to collect retired worker benefits any later.

Importantly, anyone filing for retired worker benefits also (automatically) applies for spousal benefits and vice versa. That prevents Social Security recipients from temporarily collecting spousal benefits while simultaneously earning delayed retirement credits to increase their retired worker benefits.

2. Spouses can maximize their benefits by claiming at full retirement age

Spousal benefit amounts are determined by the claiming age of the spouse and the primary insurance amount (PIA) of the retired worker on whose record they claim. The term PIA refers to the benefit a worker will receive if they claim Social Security at full retirement age, which is 67 for anyone born in 1960 or later.

When spouses claim Social Security at full retirement age, their payout will equal 50% of their partner's PIA. But when spouses claim Social Security before full retirement age, they receive a reduced payout, meaning they get less than 50% of their partner's PIA. Importantly, spouses cannot earn delayed retirement credits, so there is no advantage to starting spousal benefits later than full retirement age.

The chart below shows the correlation between birth year and full retirement age. It also shows the spousal benefit (as a percentage of their partner's PIA) for spouses who claim Social Security at age 62. In other words, it shows the smallest possible payout for spouses in each age group.

3. Widows and widowers can collect either retirement benefits or survivor benefits

Widows and widowers can collect Social Security retirement benefits (a category that includes benefits for retired workers and spouses), or they can collect survivor benefits. They cannot collect both. Eligibility for survivor benefits depends on the following conditions:

• The survivor must be at least age 60.
• The survivor cannot remarry before age 60.
• The couple must be married for at least nine months before the spouse's death.

When widows or widowers claim Social Security survivor benefits at full retirement age, the payout will equal 100% of the deceased spouse's benefit. This differs from spousal benefits, which depend on the retired partner's primary insurance amount (not their actual benefit).

Likewise, when widows or widowers claim Social Security survivor benefits before full retirement age, the payout will be reduced. The maximum reduction occurs at the earliest possible claiming age, which is 60 years old. At that age, the survivor will receive 71.5% of their deceased partner's benefit.

Importantly, widows and widowers should apply for survivor benefits only if their deceased partner's Social Security payout was larger than their own. Put differently, if the widow or widower already receives the larger payout, there is no advantage to applying for survivor benefits.

4. Divorced spouses can claim Social Security spousal benefits on their ex-partner's record

Divorced spouses can still collect Social Security benefits based on their ex-partner's work record. Eligibility depends on the following conditions:

• The divorced spouse must be at least age 62.
• The couple must have been married for at least 10 years.
• The divorced spouse cannot be remarried.

There are three possible points of confusion. First, spouses cannot typically collect benefits on a partner's work record unless that partner is also receiving benefits. But that rule does not apply to divorced spouses.

Second, divorced spouses can receive Social Security spousal benefits even if their ex-partner remarries. In other words, whether or not a divorced individual is eligible for spousal benefits depends only on their marital status.

Third, some divorced spouses mistakenly believe that (1) claiming Social Security on the work record of their ex-partner will impact their ex-partner's benefit and that (2) their ex-partner will be notified if they claim spousal benefits. Neither is true.

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