The Social Security Spousal Benefit – Fully Explained

Following up my article which provided several brief examples of the Social Security Spousal Benefit, I thought I’d provide some further explanation and background for the provision. It appears from some of the feedback I have received that there is a great deal of confusion over this provision, so hopefully the further background explanation that I’m providing here will be of help.

I have listed below several additional background details about how the Social Security System works, in order to help you better understand the prior article.

Additional Background Explanation

As stated at the outset of the previous article, this is one of the most confusing provisions of the Social Security system. Don’t expect to fully understand the tenets of the provision in a brief reading – you’ll want to read through the examples carefully, comparing each example to your own situation and considering the outcomes.

1. In the original article, I used two acronyms in my explanations, both of which were explained briefly at the outset of the article. I’ll explain and define each of them further here.

FRA – Full Retirement Age. This is the age at which you would become eligible for your full Social Security benefit (also known as your Primary Insurance Amount, which we’ll get to next). It used to be that FRA (Full Retirement Age) was 65 for all people – but with the 1983 amendment to the system, the age was gradually increased. Full Retirement Age (FRA) depends on your year of birth, according to the table below:

Year of Birth FRA
1937 or before 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943-1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 or later 67

PIA – Primary Insurance Amount. This amount is, for most folks*, equal to the amount that you would receive at Full Retirement Age (FRA). This figure is the primary figure against which all calculations are run for figuring your retirement benefit, and for calculating a Spousal Benefit for your wife or husband.

* If an individual is also receiving a pension from a job which was not subject to Social Security withholding taxes, such as a teaching job or a federal, state or local government job, certain reductions will likely apply. You can read more about the impact of these non-Social Security jobs at this article which explains the Windfall Elimination Provision and the Government Pension Offset (WEP and GPO respectively, if you’d like more acronyms).

2. There is a minimum age at which you become eligible for Social Security retirement benefits, and this is the same for all people, 62. If you file at this age (or at any age before Full Retirement Age), you will be subject to a reduction from your Primary Insurance Amount (PIA) based upon the number of months you’re filing before Full Retirement Age. It’s a somewhat complicated formula (but then again, what about this system isn’t?) so rather than explaining how to build a watch I’ll show you what time it is.

The table below shows the reduction factors for various ages and years of birth. You’ll need to find the row for your Year of Birth, and then work your way across to the right for your reduction factor at various ages. Space limitations don’t allow us to display every possible age (limited to exact years), but you can get the idea of how the reduction works for ages in-between.

Year of Birth 62 63 64 65 66 67
1937 or before -20.00% -13.33% -6.67% 0.00%
1938 -20.83% -14.44% -7.78% -1.11%
1939 -21.67% -15.56% -8.89% -2.22%
1940 -22.50% -16.67% -10.00% -3.33%
1941 -23.33% -17.78% -11.11% -4.44%
1942 -24.17% -18.89% -12.22% -5.56%
1943 to 1954 -25.00% -20.00% -13.33% -6.67% 0.00%
1955 -25.83% -20.83% -14.44% -7.78% -1.11%
1956 -26.67% -21.67% -15.56% -8.89% -2.22%
1957 -27.50% -22.50% -16.67% -10.00% -3.33%
1958 -28.33% -23.33% -17.78% -11.11% -4.44%
1959 -29.17% -24.17% -18.89% -12.22% -5.56%
1960 or later -30.00% -25.00% -20.00% -13.33% -6.67% 0.00%

 

To use this table, find your Year of Birth in the first column. Move right until you reach the age that you wish to begin early benefits. This figure is the amount of reduction from your Primary Insurance Amount (PIA, see the explanation above) that you will experience by filing at this age.

At the earliest filing age of 62, for a person who was born in 1960 or later the reduction factor will be -30%. In other words, if this person files for benefits at age 62, the benefit would be 70% of the amount that this person would receive if he or she waited until Full Retirement Age (FRA) of 67 to file for benefits.

(FYI – there is also a maximum age for all people, after which your Social Security benefit will no longer earn delayed credits, and that is age 70. Delaying receipt of your benefit after Full Retirement Age causes an increase to your benefit, up to age 70.)

3. A Spousal Benefit can be available to one spouse or the other but not both. The maximum amount that this benefit could be is 50% of the other spouse’s Primary Insurance Amount (PIA, the amount that he or she would receive at Full Retirement Age). The 50% amount is available if the spouse applying for the Spousal Benefit is at least Full Retirement Age. If he or she is younger than Full Retirement Age, a reduced amount could be available. The reductions are listed below:

Year of Birth 62 63 64 65 66 67
1937 or before -25.00% -16.67% -8.33% 0.00%
1938 -25.83% -18.06% -9.72% -1.39%
1939 -26.67% -19.44% -11.11% -2.78%
1940 -27.50% -20.83% -12.50% -4.17%
1941 -28.33% -22.22% -13.89% -5.56%
1942 -29.17% -23.61% -15.28% -6.94%
1943 to 1954 -30.00% -25.00% -16.67% -8.33% 0.00%
1955 -30.83% -25.83% -18.06% -9.72% -1.39%
1956 -31.67% -26.67% -19.44% -11.11% -2.78%
1957 -32.50% -27.50% -20.83% -12.50% -4.17%
1958 -33.33% -28.33% -22.22% -13.89% -5.56%
1959 -34.17% -29.17% -23.61% -15.28% -6.94%
1960 or later -35.00% -30.00% -25.00% -16.67% -8.33% 0.00%

 

Following the example listed above where a person born in 1960 or later files for Spousal Benefits at age 62, the 50% factor is reduced by 35%. In other words, the Spousal Benefit factor for this person would be reduced to 65% of the full 50% factor, which calculates to 32.5% of the other spouse’s PIA.

4. Furthermore, the Spousal Benefit is only available if the other spouse has filed for benefits already. Stay with me on this – it’s confusing. This means that until the other spouse files for retirement benefits, the first spouse can’t file for Spousal Benefits. Once the other spouse files for retirement benefits, the first spouse, as long as he or she is at least age 62, can file for Spousal Benefits. It’s important to note that the Spousal Benefit is available only to one spouse in the couple at at time – not both, so you have to choose which option works out better for you and your spouse.

5. At Full Retirement Age, a special provision is available that allows one spouse or the other to file for her own benefit and then suspend receiving the benefit; this will enable the other spouse to file for Spousal Benefits based upon the first spouse’s record. Since the one spouse has suspended receiving her benefit, she can continue to accrue delayed retirement credits up to age 70, while at the same time the other spouse is now eligible to file for Spousal Benefits based upon her record.

6. If the Social Security recipient is filing for benefits prior to Full Retirement Age and he is also eligible for the Spousal Benefit at the same time (that is, his spouse has already filed for her own benefit), then another special provision applies, called Deemed Filing. Deemed Filing requires that, if the individual is eligible for both the Spousal Benefit and his own benefit and is younger than Full Retirement Age, then that individual must file for both benefits at that time. The only other alternative is not filing for either benefit.

If the individual is not currently eligible for the Spousal Benefit and he is filing for his own benefit prior to Full Retirement Age, Deemed Filing does not apply – even if a month later his spouse files for her own benefit, making this first spouse eligible for the Spousal Benefit. Deemed Filing only applies in the first month that the individual is filing for his own retirement benefit, and then only if he is younger than Full Retirement Age. (Roles could be reversed, as always.)

Back to the examples

Now, with this additional background information, you should be able to go back to the first article and it will (hopefully) make more sense.

Keep in mind what I mentioned at the beginning: this is complicated. Don’t expect to pick up on it immediately. If all this does is raise questions, feel free to post your questions in the comments and I’ll try to address your questions as best I can.

In addition, bear in mind that I am an independent financial advisor; I don’t work for the Social Security Administration. As such, in these articles I am reporting the way the system works – not advocating it, not agreeing with it, not defending it. I agree that many of the provisions of the system can be unfair when applied, but I don’t have any sway with the Social Security Administration to fix the problems. I’m a taxpayer just like you, and I have to deal with the system the way it stands as well.

I have spent quite a bit of time studying how the system works in order to help my clients. As a result of my study of the system, I’ve also written a book that you may find useful – A Social Security Owner’s Manual. The Spousal Benefit and many other confusing provisions of the Social Security system are explained in the book.

About the author

Avatar
Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

An IRA Owner's Manual
A Social Security Owner's Manual

16 Comments

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  • I am 63 and plan on working to 66, my spouse is 62 and quit working at 59.

    Can my spouse begin collecting her benefit now, and switch over to spouse benefit when I retire at 66 and still receive full spouse amount?

  • Jim…I’m a reasonably smart guy, but I’m still not clear about the spousal benefit thing. My wife is 65 and begin receiving SS benefits when she turned 62. I am 64, retired, but not taking SS benefits currently. Can I claim a spousal benefit under my wife’s earnings, then switch to my own benefit when I turn 66? I thought I had this sorted out until I read your “deemed filing” section.

  • Jim
    What is the law regarding death benefits.
    Is there a minimum age one needs to be to receive spouse’s SS upon his death? He is legally blind, 67,I am 57. Also, How long do you need to be married to be eligible?

  • Vincent,

    If your mother applies for benefits before FRA, she will have to receive both her own benefit and the Spousal Benefit since she’s eligible for both – this is known as “deemed filing”. If she waits until FRA she can apply solely for the Spousal Benefit and let her own benefit accrue delayed retirement credits up to age 70. This will only be pertinent if her own benefit might (after the delay credits) be greater than the Spousal Benefit.

    Hope this helps –

    jb

  • Jim,

    My father retired at 62 with reduced benefits 2 years ago. My mother reaches her FRA in August of this year. My fathers PIA is much greater than my mothers. Can she apply for benefits on her record today and apply for spousal benefit in Aug at her FRA for 50% of mt fathers PIA? Does my fathers early retirement affect my mother’s spousal benefit at FRA? In other words, does my fathers PIA change according to when he chooses to retire?

  • Chet –

    The wife can file for Spousal Benefits when the husband files, but since she’s still under her own FRA the spousal benefit will be age-reduced, as you note. The amount of her total benefit at that time will not be greater than the age-reduced spousal benefit. In other words, she doesn’t get both benefits added together, but rather her own age-reduced retirement benefit plus an offset to increase her overall benefit up to the limit of the age-reduced Spousal Benefit (assuming it’s greater than her own age-reduced retirement benefit).

    Hope this helps –

    jb

  • Ed,

    Here’s what must be a common situation: The husband is 3 1/2 years older than the wife and has a much larger PIA. The wife becomes eligible in March 2012, while the husband will reach FRA in November 2012. As I understand it, the wife can file for her own (age-reduced) benefits in March. In November, the husband will file for his PIA and suspend or not depending on their financial situation. At that time (November), can the wife then file for spousal benefits, again age-reduced? The spousal benefit will be much larger than her own benefit. Does she get them both (the sum) or just the spousal?

    Thanks for your help!
    Chet

  • Jim I was told that if you apply for benefits prior to your FRA, under the deemed filing rule, you have no choice, you get the difference between spousal and retirement benefits after reduction. In other words, you get no choice, even if your spouse with the higher PIA does not file for his own benefits. I was under the belief that if the spouse does not file he can not file and suspend because heis under FRA, the spouse is considered undeemed and can only elect her retirement benefit minus 25 per cent. Then at 66 she can switch to spousal benefit, husband files and suspends, adding the 50 percent PIA difference on to her reduced PIA. lease give me your input..manythanks

  • Unfortunately Donna, the way the Spousal Benefit works is that if you file for it at any time prior to Full Retirement Age, Deemed Filing applies, which requires that you file for both your own retirement benefit AND the Spousal Benefit if you’re eligible for both.

    So in other words, you could not solely file for the Spousal Benefit at age 62, since that is prior to your Full Retirement Age. If you file for the Spousal Benefit you have to file for your own retirement benefit at the same time, which will result in a permanent reduction for both benefits.

    Hope this helps –

    jb

  • Dear Jim, I am 56 my husband is 71 and is collecting full social security at his full age. I read in the aarp magazine that I could collect spousal benefit at age 62 a percentage of his and hold off on my full benefits until I reach my full age for those benefits. The more I read about this I am thinking some one was wrong and I have to wait until my full age to get the most out of my benefits. Can I get a percentage from his benefits from age 62 to 67 and then apply for my full amount? thanks for your time Donna

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