Social Security retirement benefits are usually straightforward. You work for years. You file for Social Security once you're old enough to do so. You receive the benefits. Easy-peasy, right?
However, there can be some twists and turns with Social Security -- especially when you're married. Here are three little-known Social Security rules all married retirees should know.
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1. When your spouse claims benefits can matter a lot
It's no secret that one spouse can claim Social Security retirement benefits based on the other spouse's earnings history. However, when the higher-earning spouse claims benefits can matter a lot.
For example, suppose Fred's wife, Wilma, earned much more than he did during their careers. The earnings gap is so large that Fred will receive greater Social Security benefits using Wilma's earnings history than his own. Fred can receive up to 50% of Wilma's Social Security retirement benefit at her full retirement age (FRA).
Let's say, though, that Wilma retires and claims Social Security benefits before her FRA. This will not only reduce her benefit amount, it will reduce Fred's benefit also.
What if Wilma waits until age 70 to claim her Social Security retirement benefits? This will increase her benefits but not Fred's spousal benefits. Remember: Fred can receive up to half of Wilma's benefit at her FRA. However, Wilma's holding off until age 70 could potentially help Fred in another way by increasing his survivor benefits if Wilma dies before him.
2. Spouses can initially claim benefits based on their earnings and then later switch to spousal benefits in some cases
Another Social Security rule that not everyone knows about is that lower-earning spouses can initially claim benefits based on their earnings history and then later switch to spousal benefits (i.e., claiming benefits based on their higher-earning spouses' earnings history) in some cases. This approach could maximize the overall retirement benefits a married couple receives.
Let's again use Fred and Wilma as our examples. Suppose Fred is three years older than Wilma. He decides to claim Social Security at his FRA of 67. Wilma is 64 at the time. She continues working until her FRA of 67. Fred could then apply for spousal benefits based on Wilma's earnings history and receive higher benefits.
However, this strategy doesn't work when a higher-earning spouse has already claimed Social Security benefits. For example, suppose Wilma claimed her benefits at age 64 when Fred claimed his benefits. Fred's benefits will be based on the higher of the benefits based on his earnings record and 50% of Wilma's benefits based on her earnings record (with early retirement penalties applied since she claimed benefits before her FRA).
3. One spouse working while receiving benefits can impact the other spouse's benefits
Social Security will deduct $1 from your retirement benefit for every $2 you earn above a specified annual limit if you're under your FRA for the entire year. This is called the Social Security earnings test. The annual limit is $23,400 in 2025. Social Security will deduct $1 for every $3 you earn above a higher annual limit in the year you reach your FRA. This higher limit is $62,160 in 2025.
Many married retirees might not realize, though, that one spouse who continues to work while receiving Social Security benefits can impact the other spouse's benefits. This can happen when a lower-earning spouse receives benefits based on a higher-earning spouse's earnings record.
Let's suppose Fred and Wilma from our previous examples claim Social Security benefits at the same time. Wilma is 62, while Fred is 65. Again, Fred's benefits are based on Wilma's earnings history. Now suppose that Wilma continues to work and earns more than the annual earnings limit. Social Security will deduct from both her benefits and Fred's benefits.
There is some good news, though. These deductions are only temporary. The earnings limits go away once you reach your FRA and the money withheld will be repaid over time.
