Millions of people pay into Social Security throughout their careers and wind up eligible for benefits once retirement rolls around. But if you never worked, you might assume that collecting Social Security isn't an option for you.
That's not necessarily true, though. If you're married to someone who's eligible for retirement benefits from Social Security, then you may be entitled to a spousal benefit based on that person's record. Similarly, if you were married to someone in that boat, you may be able to claim spousal benefits based on your ex-spouse's record.
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But if you're going to claim Social Security spousal benefits, you might as well sign up at your full retirement age (FRA). Waiting beyond that point won't do you any good from a financial perspective.
When there's no upside to waiting
When you're filing for Social Security benefits based on your own earnings record, there's an upside to delaying your claim past FRA. For each year you delay your filing, up until the age of 70, your monthly benefit gets an 8% boost -- and a permanent one at that.
But the rules are very different in the context of spousal benefits. When you're claiming a spousal benefit, there's no such thing as a boosted payday.
Once you reach FRA, you're entitled to your full spousal benefit, which is 50% of the sum your current or former spouse is eligible to collect. But you can't grow that benefit by waiting to file, so there's no sense in denying yourself money you're otherwise eligible to receive.
Now that said, if you file for your spousal benefit before reaching FRA, you can expect to see that benefit reduced. The same holds true if you're claiming Social Security based on your own earning record.
You're allowed to sign up for Social Security once you reach the age of 62. But filing for benefits ahead of FRA will mean having to accept a lower monthly payday for life.
But again, there's no upside to delaying a spousal benefit claim beyond FRA. So if your FRA is 67, for example, which is the case if you were born in 1960 or later, then that's the exact age to start taking your spousal benefits.
Know the rules
Social Security is a program that's loaded with rules. And the idea of sitting down and reading them might seem less than appealing.
But as you get closer to retirement, it's really important that you familiarize yourself with the way Social Security works. If you don't, you could end up making a big mistake -- like delaying a spousal benefits claim needlessly -- due to being misinformed.
You should also know that even if you're entitled to Social Security benefits based on your personal earnings history, you might still be eligible for a spousal benefit if it results in a higher monthly payday for you. But know that you can't collect both your personal benefit and a spousal benefit. You'll only be eligible for the larger of the two.
