Financial Planning Focus - Client Question: What Are Spousal Social Security Benefits?
Spousal social security benefits allow a lower earning spouse to use the work record of a higher earning spouse to receive a higher social security benefit than they would have based on their own work record. Benefits are calculated based on the worker’s age and work record at the time of filing. Reduced spousal benefits are available beginning at age 62 (reduced) and increase until full retirement age, at which time the spousal benefit is typically 50 percent of the working spouse’s retirement benefit. In order to qualify for the spousal benefit, the worker whose record the benefit is calculated on has to be receiving their retirement benefit.
For those born after January 1, 1954 the Social Security Administration (SSA) has implemented a policy known as deemed filing. Deemed filing means that when someone applies for either their retirement benefit or spousal benefit, the SSA “deems” that they have filed for both. The total benefit paid will be the higher of the two benefits. Deemed filing eliminates the ability to claim a spousal benefit while delaying the retirement benefit of the other spouse (also known as file and suspend).
For those born prior to 1954, there is another spousal claiming option which involves filing a restricted application. Filing a restricted application allows a full retirement age spouse to apply for a spousal benefit, while restricting the application for their own retirement benefit. Going forward, the spouse whose application is restricted continues to build up delayed retirement credits that will increase their retirement benefit, which they are able to claim at a later date.
Please contact us prior to filing for social security benefits so that we can review the options with you.