Changes to Social Security Spousal Applications

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Who this applies to: Spouses who were born before January 2, 1954 and are not currently receiving Social Security.

Summary

Social Security Spousal Benefits allow a husband or wife to receive up to 50% of their spouse’s Full Retirement Age (FRA) Social Security benefit (also referred to as Primary Insurance Amount). This maximum 50% spousal benefit can be achieved when both spouses are at their full retirement age (FRA) at the time of application. An individual can apply for spousal benefits as early as age 62 at which time they would receive 35% of their spouses FRA benefit. The Bipartisan Budget Act of 2015 significantly changed the rules for those wishing to receive spousal benefits.

Prior to the Bipartisan Budget Act

At FRA a spouse could receive this 50% spouse’s benefit while simultaneously deferring receipt of their own retirement benefits. This deferral allowed the spouse to increase benefits payable on their own earnings record by 8% per year up until age 70. At age 70, the spouse would then flip over to receive their own retirement benefits. Not only would the individual get a 32% larger retirement benefit, they were still able to receive some form of Social Security during a period of “deferring benefits”.

Current Rules

The 2015 legislation eliminated this opportunity with few exceptions. If an individual was born prior to January 2, 1954, this strategy can still be used if a few criteria are met:

  • The individual applying for spousal benefits must be at or beyond their Full Retirement Age. (For individuals born between 1943 – 1954 this age is 66.) And,
  • The spouse not applying for spousal benefits must be receiving Social Security Benefits.

Individuals who were born after January 2, 1954 will have their applications handled differently. When an application is made, the individual will receive the largest benefit they are entitled to at that time whether it be spousal benefits, retirement benefits or a combination of benefits.

This flexibility is also available to divorced spouses with a few caveats. Unlike married couples, divorcees don’t have to wait for former spouses to file for Social Security benefits. As long as they were married 10 years and have been divorced at least 2 years, they can file for spousal benefits if their former spouse is at least age 62. Reductions can apply depending on the age of both parties in a given scenario.

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