As if you really needed another reason to thank your spouse,
here it is: When it comes to Social Security, your beloved's
benefits could have a meaningful impact on your lifetime "take
But you need to play your cards right, and that can be easier
said than done.
For one, there's an awful lot to know. Spousal benefits are a
powerful (but not necessarily well understood) component of the
Social Security program.
And secondly, there's no one-size-fits-all strategy for making
the most of your joint benefits. Your decision will depend on the
benefits eligibility, age and health of both you and your spouse.
It also should take into account your other sources of retirement
income (e.g., IRA, 401(k) or other savings).
Today, I'll highlight some key points and provide a few
hypothetical examples that hopefully will offer some food for
Know This (at a Minimum)
No matter what your circumstance, know at least this much
about spousal benefits:
- You are entitled to a spousal benefit if you have been
married to your spouse for at least one year.
- The amount of your spousal benefit is equal to 50% of your
spouse's full Social Security benefit (his or her
primary insurance amount
) once you reach
full retirement age (
- For you to collect spousal benefits, your spouse must have
filed for Social Security, but does not need to be actively
collecting his/her benefits. This is known as
filing and suspending
. Note that your spouse cannot suspend his/her own benefit
(thereby earning an increased individual benefit) until he/she
For the many other nuances associated with spousal benefits,
check out our Social Security guide
Keeping It Real
Now let's look at a few "real-life" applications:
A common collection strategy under a single-earner scenario is
for the non-earner to begin taking spousal benefits (50% of his
or her spouse's individual benefit) as soon as he or she reaches
FRA. Remember, there's no advantage to delaying, as spousal
benefits do not increase after FRA (see graph below).
Source: Social Security Administration (www.ssa.gov)
Importantly, as noted above, the earner must first file
for Social Security in order to "activate" those spousal
benefits, but does not actually need to begin collecting
individual benefits. This "file and suspend" strategy (available
at FRA, but not before) allows him/her to earn a monthly "raise"
in individual benefits (I spoke about this in
) while his/her spouse collects the maximum spousal benefit. This
can boost overall family income down the road.
Two Earners, One High and One Low:
This scenario is more complicated. In a case where the spousal
benefit is larger than the individual benefit, the lower earner
can collect individual benefits at the earliest possible
age-currently age 62, and then add on adjusted spousal benefits
at FRA. The higher earner, meanwhile, would file and suspend in
order to take advantage of increased individual benefits.
Two Similar Earners:
There's a potentially lucrative but often overlooked strategy for
couples who have accrued similar benefits: One can take
individual benefits at FRA while the other takes spousal benefits
and allows his/her individual benefits to grow. At age 70, the
latter converts to individual benefits and, having earned a 32%
"raise" from the government, increases the household income
stream by a meaningful margin.
Spousal benefits can be complex. I encourage you to take
advantage of all available resources, including the
BlackRock Retirement Center
Security Administration website
and, of course, your financial advisor, to arrive at the
collection strategy that makes the most sense within the context
of your broader retirement plan.
Want more on Social Security?
Strategies for Collecting Social Security
. And stay tuned. I'll be talking about survivor benefits, as
well as collection privileges for divorcees (yes, your ex can
claim on your earnings history as well) in future posts.
Sources: BlackRock; Social Security Administration. Please see
the Social Security Administration's website at www.ssa.gov for
more information, restrictions and limitations about Social
Rob Kron, Managing Director, is the head of Investment and
Retirement Education for BlackRock's U.S. Wealth Advisory
group. He is the newest contributor to
and provides practical information on topics that are
important to every saver and investor of every age. You can
find more from Rob
The above commentary is based on Social Security laws in
effect as of May 2014. Congress has made changes to the laws in
the past, and can do so at any time in the future.
This material is provided for educational purposes only and
does not constitute investment advice. The information contained
herein is based on current tax laws, which may change in the
future. BlackRock cannot be held responsible for any direct or
incidental loss resulting from applying any of the information
provided in this publication or from any other source mentioned.
The information provided in these materials does not constitute
any legal, tax or accounting advice. Please consult with a
qualified professional for this type of advice.