Social Security benefits can provide you with a reliable retirement income stream. Deciding when to start receiving benefits is an important question, especially if you are married and hoping to qualify for spousal benefits. If you are already receiving Social Security, you may wonder if it is possible to switch to spousal benefits later. The answer depends on whether your partner is already receiving Social Security benefits.
A financial advisor can help you determine what you qualify for and when is the best time to withdraw your full pension plan.
How do social security partner benefits work?
Calculating Social Security benefits as a married couple is a little different than doing so as a single person. When someone files for Social Security benefits, their spouse may be able to claim a spousal benefit. The benefit is based on the spouse’s contributions to Social Security and is capped at 50% of their benefit amount at full retirement age. For example, if they were receiving $2,200 per month at full retirement age, their spousal benefit would be a maximum of $1,100 per month.
To be eligible for Social Security benefits for your spouse, you must:
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Be at least 62 years old, the earliest possible age at which you are eligible for a benefit from the Social Insurance Bank OR
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Care for a child under the age of 16 or a child receiving a disability benefit from the Social Insurance Bank
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Be married for at least one year to someone who has applied for their pension
When you file for spousal benefits, the Social Security Administration calculates your benefits based on your own work and earnings history. If you qualify for both your retirement and spousal benefits, you will receive the higher of the two.
If your spouse has not yet applied for a pension, you cannot receive a partner benefit. However, you can apply for your own pension if you are at least 62 years old.
If you file for Social Security at age 62, your benefit amount will be reduced, lower than the amount you would have been entitled to if you had waited until full retirement age. Delaying benefits until age 70, on the other hand, increases your benefit amount.
If you claim spousal benefits and you file before your full retirement age, your benefit amount will be around 30% instead of 50%. The only exception is if you are claiming spousal benefits and you are a carer for a child under 16 or a child with a disability.
Can I convert my social security benefit into a partner benefit?
Switching from your regular retirement benefits to a spousal benefit is something you may be interested in if you hope to maximize your Social Security benefits. Whether you can make this switch depends on whether your spouse is already receiving benefits.
If your spouse is not yet receiving a pension, you can start receiving your regular Social Security benefits at age 62. If your spouse files for their benefits later, you can switch to spousal benefits. This could potentially increase the total amount of benefits you receive as a couple if they wait until age 70 to start receiving their benefits.
What if your spouse is already receiving his or her Social Security benefits? In that situation, the deemed filing rule applies. That rule states that when someone files for their regular retirement benefits, they will also be approved for spousal benefits if they are eligible. So again, you will get the higher amount of the two.
Consider talking to a financial advisor who can help you manage your Social Security benefits and create a solid retirement plan.
Assumed Submission and Partner Benefits
The Social Security Administration implemented the deemed filing rule to prevent double-dipping. Before the rule, if a person’s spousal benefits were higher than the individual’s benefit, he or she could receive a combination of benefits equal to the higher benefit. Deemed filing prevents spouses from receiving one type of retirement benefit while also benefiting from deferring another type of benefit.
There are some exceptions to this rule, which still allow you to file for spousal benefits separate from your own pension benefits. You may qualify for an exception if you:
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Born before January 2, 1954
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Do you care for a child under the age of 16 or a child with a disability?
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Eligible for a disability benefit from the Social Insurance Bank
If you have already received your pension benefit and your spouse is receiving a spousal benefit, he or she can choose to switch to his or her pension benefit if he or she was born before January 2, 1954. In that case, you can apply for a supplementary spousal benefit on top of your normal benefit as soon as the benefit starts.
When should you apply for partner benefits?
Timing is important in determining when to claim spousal benefits. Again, taking benefits before full retirement age may reduce the amount of benefits you are eligible to receive. However, delaying spousal benefits after full retirement age will not increase the benefit amount as it would with regular retirement benefits.
When determining when to make partner or pension payments, it is helpful to look at the bigger picture and consider:
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Life expectancy and how long you and your partner expect to be dependent on Social Security benefits
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Health and the possibility that one or both partners will need long-term care at some point
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Other sources of income, including investments, a 401(k) or IRA, or money earned from part-time work or side jobs
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Pension budget and estimated expenses
For example, living longer may make delaying Social Security benefits more attractive. On the other hand, if you don’t have enough savings and investments, you may need the extra income that Social Security can provide sooner rather than later.
If you are unsure about when to take spousal benefits or whether you can convert your retirement benefits into spousal benefits, it may be helpful to talk to a financial advisor. An advisor who is well-versed in Social Security planning can help you determine the right time to take those benefits.
It comes down to
It is possible to convert your Social Security retirement benefits to spousal benefits if your partner has not yet filed. Whether or not it makes sense to do so depends on your current age and the age at which you both filed for benefits.
In general, the longer you wait to file a Social Security application, the better, as this can result in a higher benefit.
Tips for retirement planning
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Consider talking to your financial advisor about switching your retirement benefits to spousal benefits if your spouse plans to claim their own benefits. If you don’t already have a financial advisor, finding one doesn’t have to be difficult. With SmartAsset’s free tool, matches you with up to three financial advisors who serve your area, and you can interview your advisors for free to determine which one is the best fit for you. If you’re ready to find an advisor who can help you achieve your financial goalsstart now.
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Talking to your advisor can also help you come up with a strategy for coordinating Social Security with other sources of income, such as a pension plan, annuity, 401(k) or government retirement plans. Deciding when to tap each income stream can affect your tax situation, so it’s important to understand the best order for withdrawing assets. An advisor can also give you advice on how to claim Social Security benefits as an ex-spouse if you’re now divorced.
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Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid—in an account that isn’t subject to big swings like the stock market. The tradeoff is that the value of liquid assets can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks.
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