Understanding Social Security can be complicated, and it’s easy to feel overwhelmed by all the rules. One area that often confuses is how spousal benefits work, especially when you or your spouse has already started receiving your Social Security benefits. Many people wonder, “If we didn’t file for spousal benefits, is it too late to make changes?” Let’s break it down.
Social Security: One Benefit at a Time
One key thing to remember is that you can only collect one Social Security benefit at a time. While this may sound straightforward, it can cause issues when you don’t fully understand how spousal benefits work. The main question here is: Can you go back and claim spousal benefits if you missed out earlier?
A couple shared their concern on Reddit about not filing for spousal benefits and wondered if they had lost out on extra Social Security income. The wife retired first and started receiving her monthly benefits. Then, the husband retired two years later. The couple was wondering if the wife should’ve filed for spousal benefits during this time, but the situation isn’t as straightforward as it may seem.
How Spousal Benefits Work
Here’s how it works: Spousal benefits are available when your spouse is already receiving their own Social Security benefits. If your spouse is eligible for Social Security and has filed for their benefits, you can receive a spousal benefit. This benefit can be up to 50% of your spouse’s monthly benefit at their Full Retirement Age (FRA).
However, Social Security will only pay you the larger of your own benefit or the spousal benefit—not both. This can lead to confusion about whether you missed out on additional benefits.
Did This Couple Miss Out on Benefits?
In this particular scenario, let’s look at the wife’s situation. She retired first and began receiving Social Security benefits. When the husband retired and filed for his own benefits two years later, he began receiving $3,000 per month at his FRA. Based on Social Security rules, the wife would then be eligible for a spousal benefit, which could be up to $1,500 (50% of her husband’s $3,000 FRA benefit).
But here’s the catch: If her own benefit was larger than the spousal benefit, she wouldn’t receive the spousal benefit. For example, if the wife was already receiving $1,400 per month, which was her own benefit, she wouldn’t see any change because her current benefit was more than the $1,500 spousal benefit.
In other words, Social Security would compare the two options (her own benefit vs. the spousal benefit) and choose the larger one. If she were already receiving $1,400, which is larger than the $1,300 spousal benefit, her monthly income wouldn’t increase.
What Should You Do to Maximize Social Security Benefits?
Now that we’ve gone over the example, what’s the key takeaway here? It doesn’t seem like this couple missed out on any Social Security benefits because, in their case, the wife was already receiving more than the spousal benefit would’ve given her. But that doesn’t mean everyone’s situation will be the same.
If you’re approaching retirement and want to avoid making similar mistakes, here are some steps you can take:
- Research Social Security Thoroughly: Understanding the ins and outs of Social Security is vital. While it may not be the most exciting task, it will pay off in the long run. Look for credible sources that can help you understand how spousal benefits work and how they might apply to your situation.
- Consult a Financial Advisor: A financial advisor can be your best ally in navigating Social Security. Before you file, reach out to an advisor to develop a smart strategy for maximizing your benefits. They can explain how spousal benefits work and help you coordinate your filing with your spouse to ensure you’re getting the best possible outcome.
- Don’t Rush Into Filing: It’s tempting to file for Social Security as soon as you’re eligible, but this might not always be the best choice. Take time to plan your strategy and coordinate with your spouse to make the most of both your benefits.
Conclusion
Social Security can be tricky, but with the right knowledge and expert guidance, you can make the most of it. Whether you’re about to retire or already receiving benefits, understanding how spousal benefits work is essential. By planning carefully and consulting with an advisor, you can ensure you’re getting the maximum benefits possible.
Get Started Today: Don’t leave your retirement to chance. With SmartAsset, you can connect with a trusted financial advisor who can help you plan your retirement, including optimizing your Social Security benefits. Get started now and make your retirement dreams a reality.
Disclaimer: This article has been meticulously fact-checked by our team to ensure accuracy and uphold transparency. We strive to deliver trustworthy and dependable content to our readers.
