The Big Social Security Blunder Married Couples Risk Making

Spousal benefits from Social Security can be a huge source of retirement income.
It’s important to understand the rules of claiming them.
Waiting too long to get spousal benefits could result in lost money.
A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality. Read more here.

The typical path toward collecting Social Security in retirement generally goes something like this: You work for a good number of years, you pay taxes on the wages you earn, and you eventually qualify for retirement benefits once you turn 62.

Read: Data Shows One Habit Doubles American’s Savings And Boosts Retirement

Most Americans drastically underestimate how much they need to retire and overestimate how prepared they are. But data shows that people with one habit have more than double the savings of those who don’t.

Then, if you wait until full retirement age (FRA), which is 67 if you were born in 1960 or later, you get your monthly Social Security checks without a reduction. If you choose to delay your claim beyond that point, your benefits get a boost until age 70.

For couples where one person never worked, there can be a different path toward Social Security — spousal benefits.

Spousal benefits are available to current and former spouses of Social Security recipients. And they can be a huge source of household income.

But there’s one mistake married couples risk making in the context of spousal benefits. And it’s one you and your spouse should try to avoid.

The rules of claiming spousal benefits aren’t exactly the same as claiming Social Security based on your own work record. When you’re claiming benefits on your personal wage history, you get credit for delaying past FRA. Specifically, each year you wait boosts your monthly checks by 8%.

That incentive does not apply to spousal benefits, though. With spousal benefits, the most amount of money you can get is 50% of your spouse’s primary insurance amount at FRA. And if you delay a spousal benefit claim, you risk ending up with less household income from Social Security all in.

Let’s say your spouse’s primary insurance amount is $2,400 at their FRA. If you claim spousal benefits at your FRA, you should get $1,200.

Now it’s possible to claim spousal benefits before FRA — as early as age 62 — and reduce them in the process. But you can’t grow a spousal benefit by waiting. So once you reach your FRA, you should actually claim spousal benefits right away.