ASocial Security spousal rule that was around for decades ended this year for the last eligible retirees — those who turned 70 on Jan. 1, 2024. The rule allowed recipients to switch between their benefits and their spouses’ to receive the maximum amount. But unless you were born before Jan. 1, 1954, you have not been able to take advantage since the law was changed in 2016.
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Under the expired rule, a married person could delay benefits and claim spousal benefits instead. The person then would switch to his or her benefits at age 70, which maximizes the monthly Social Security payment because of the delayed retirement credits.
The rule changed through the Bipartisan Budget Act of 2015, making it so anyone who turned 62 after Jan. 1, 2016, could no longer maximize Social Security benefits in this way.
With that rule no longer in effect, you need to find other strategies to maximize your spousal benefits.
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Plan Ahead
Making the most of Social Security spousal benefits requires discussing who should claim benefits and when. Social Security always pays the higher of the individual’s benefits or spousal benefits to the lower earner. Couples claiming benefits are advised to create an online account with the Social Security Administration so they can review their estimated benefits at various claiming ages.
“It’s critically important for married couples to do Social Security planning,” Matthew Allen, co-founder and chief executive officer of Social Security Advisors, told MarketWatch.
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Avoid Claiming Benefits Too Early
As GOBankingRates previously reported, the amount a beneficiary receives from Social Security depends on both their work record and when they file. Although the full retirement age is now 67 for most workers, you can file a claim to start benefits as early as 62. However, your benefits will be permanently slashed by as much as 30%.
For example, if your full retirement benefit is $2,000 per month at age 67, by filing at age 62, that monthly amount will drop to just $1,400. A spouse’s Social Security benefit is directly tied to the payout that the primary beneficiary receives. If your spouse files for benefits at age 62, your spousal benefit will be permanently reduced as well.
But Don’t Necessarily Wait Until 70 To File, Either
Normally, the longer you wait to collect Social Security retirement benefits, the bigger your check. Waiting until full retirement age guarantees you’ll get the full benefit you are owed while waiting to age 70 ensures the maximum benefit. Just as workers face a reduced Social Security retirement payout if they claim early — like at age 62 — those who delay their payouts will see them increase.
However, spouses can’t take advantage of the age 70 rule because their payout is capped at 50% of the primary beneficiary’s full retirement benefit. Even if your spouse waited until age 70 to collect Social Security, your maximum benefit would remain at 50% of the primary beneficiary’s FRA benefit amount.
