CHAPTER 7

Social Security Application -
Maximize Payment to Your Spouse





Spouse benefits can change based on when you submit your social security application. It is important to note that the amount that a spouse is eligible to receive can vary based on the amount that the spouse has worked covered by social security.


Case 1

Let’s take an example to demonstrate what may happen when evaluating your the social security payments for a spouse. We will assume for a moment that the couple in this case started out their career after a marriage in their 20’s. Both the husband and the wife took jobs that were covered by social security and they both made payments into the systems.

After 5 years the wife decided that she wanted to stay home with her two children as they grew up and went to school. Therefore, the wife worked 5 years and paid into social security for 4 quarters for each year or 20 quarters. She originally intended to go back to work later on, but decided to continue to stay a homemaker and raise the children. She did not go back to work in a position covered by social security. Based on these assumptions, she would NOT have worked 40 quarters by the time she and her husband reached full retirement.

Since she has not worked the required 40 quarters, she would not qualify for social security payments on her own. Although she paid into social security for 20 quarters, she would not be approved for benefits should she submit a social security application for benefits based on her own work record. No payments would be made to her by social security based on her work record.

However, since her husband did work at least the required 40 quarters by the time he reached full retirement, she would qualify for social security spouse benefits calculated on his payments into social security. An important note here is that she CANNOT take spouse benefits until such time as the husband takes his benefits.

When she does submit her social security application and starts receiving spouse benefits, it will be paid based on her age at the time she begins receiving such benefits. If we assume that she applies for spouse benefits at age 66 (full retirement age), then she will receive the maximum allowed, which is 50% of the husband’s benefits at full retirement age.

If she applies for such spouse benefits at age 62, then she will receive a reduced amount of 35% of the husband’s benefits at full retirement age. The following table provides a quick view of the impact of taking spouse benefits before full retirement age.

Spouse Age Spouse Benefits Reduced To
6235.0%
6337.5%
6441.7%
6545.8%
6650.0%


Case 2

In our next example, the couple started off the same way, however, the wife decided to go back to work after the children were raised. She worked past an additional 20 quarters in a position covered by social security.

Therefore, when she reached age 62 she could submit her social security application and receive social security benefits based on her own earned income because she contributed to social security for at least 40 quarters. By submitting her own social security application in her name, without applying for spousal benefits, she would qualify for social security payments to be made to her at age 62, if she so desired. Those payments would be reduced by the standard amount at age 62 and she would receive 75.0% of the amount she would have received at full retirement age.

Generally, it is beneficial for the woman in this case to indeed take her own social security payments from age 62 until such time as the husband begins to take his social security benefits. Then she can apply for and will receive her spouse benefits, if that benefit amount is greater than her benefits under her own work record.

So she can take advantage of her work record and then her husband’s work record to maximize social security payments to her.


Case 3

If we assume that our couple is now close to retirement and the wage earner dies, then the widow or widower is entitled to social security survivor benefits.

The widow or widower is entitled to reduced benefits as early as age 60 or full benefits at full retirement age or older. If the widow or widower is disabled, then benefits can be paid out as early as age 50.

It is important to note that if you receive a widow’s or widower’s benefit and you qualify for your own retirement benefit that is greater than your social security survivor benefits, then you can switch to your own benefit as early as age 62.

As always, review your situation and get all of the facts before making your decision.




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