When you get married, you receive Social Security spouse benefits as a result of your official union. These benefits are provided only to those individuals who have a legal marriage recognized by the state where they were joined. Cohabitation arrangements or domestic partnerships will not qualify two people for spousal benefits. If you are married, you can consider the following features as part of your retirement benefit structure.
Benefit Election Options
It is rare for two people in a marriage to have equal Social Security benefits. Whichever spouse earned more during the course of the marriage has officially contributed more to the Social Security pool, and this individual will receive higher benefits. If you are married to a person who is eligible for higher benefits than you are, you may elect to receive your benefits based on that individual's schedule instead of your own. However, the benefit is not an equal match. It works as follows:
- If you are between 62 and 66, you can elect to receive benefits in an amount equal to 35 percent of your spouse's benefits.
- If you are over 66, you can receive funds in an amount equal to 50 percent of your spouse's benefits.
Benefits after Death
If you are a widow or widower, you are eligible for benefits in an amount equal to 100 percent of your deceased spouse's benefits. It is important to remember this sum will be in lieu of your own Social Security Benefits. However, if your deceased spouse was receiving higher benefits than you were at the time of his or her death, you can pick up that plan instead of returning to your own. An individual cannot list a beneficiary on a Social Security plan as on other retirement plans. Therefore, only the spouse will have access to this option upon death.
Electing Your Benefits
You should elect benefits that will provide you with a higher sum of funds over time. If your Social Security benefits are equal to 50 percent or more of your spouse's, then it will never make sense to elect to use your spousal benefit options unless your spouse passes away. However, if you earned significantly less over your lifetime than your spouse, you will likely want to elect the spousal benefit option at some point in your life. You can begin collecting when you reach 62, even if your spouse has not yet begun collecting his or her Social Security. This can represent a substantial amount of additional income to your family as you near retirement.
There are no options for a caretaker, domestic partner or cohabitant to opt for Social Security spousal benefits. If you and your partner are not legally married, it is best to create an independent retirement arrangement that would provide benefits to your partner upon your death. You can elect any beneficiary you choose on this type of account. However, non-spouse beneficiaries will have fewer options regarding how the account is distributed than spouse beneficiaries will. For these reasons, it is financially practical to opt for marriage if you can legally marry and plan on spending a life together.