Chicago, IL – Many retired couples in the United States rely on their monthly Social Security benefits to help make ends meet. Data compiled by the Social Security Administration shows that around half of all households with someone age 65 or older receive at least 50% of their family income from Social Security. With Social Security benefits accounting for such a significant portion of household budgets, it’s important for recipients to understand how they can maximize what they receive from the program.
One benefit for married couples is the Social Security spousal benefit. This can provide a significant boost to overall household income, but it can also complicate Social Security claiming strategies. Understanding how spousal benefits are calculated, when they can be claimed, and what the maximum benefit could be is essential for couples nearing retirement age.
To be eligible for spousal benefits, individuals must be age 62 or older, have been married to their spouse for at least one year, and have a spouse claiming Social Security benefits on their own earnings record. There are exemptions for those caring for a child of the spouse who’s younger than 17 or disabled.
The maximum spousal benefit for a given individual is equal to half their spouse’s primary insurance amount, calculated by adding up their 35 highest-paid years of earnings, adjusted for inflation. In 2024, the contribution and benefit base set by the Social Security Administration is $168,600, so to receive the maximum spousal benefit, the high-earning spouse must have earned at least this amount for 35 years.
Additionally, claiming the spousal benefit before reaching full retirement age will reduce its amount, while claiming it after full retirement age does not provide any additional perks. This is a key difference between spousal benefits and personal retirement benefits, where delaying claiming can result in increased benefits.
The maximum spousal benefit for 2024 is $1,924 per month, but only a very small percentage of people will qualify for this amount. It applies to individuals reaching full retirement age (or older) in 2024 with a spouse turning 62 this year so they can also claim benefits.
The primary insurance amount for each individual is based on the year they turn 60, so the maximum primary insurance amount changes for each group of people as they become eligible to claim Social Security. This presents challenges for couples looking to maximize family income through Social Security benefits.
For most couples, waiting for the high-earning spouse to reach age 70 will result in maximizing lifetime benefits for the household. It’s essential for the lower-earning spouse to determine the most beneficial claiming strategy for their own benefit as well, whether that means taking their own benefit at full retirement age and eventually switching to spousal benefits or waiting until age 70 to claim their own benefit.
Ultimately, while some individuals might qualify for the maximum spousal benefit in 2024, it’s crucial to strategize and assess the best claiming approach for each family’s unique situation. It’s advisable to calculate the numbers and consider seeking professional help to determine the optimal Social Security claiming ages for the family.