Here’s how spousal benefits can boost your Social Security payment by thousands of dollars

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Being a retired spouse can have its benefits – Social Security benefits, that is.

The Social Security Administration offers several ways for retirees to boost their monthly Social Security payment. While these options can lead to a big increase in how much a spousal recipient receives, many don’t know they exist, said financial advisor Nick St. George, owner of St. George Wealth Management.

“I have seen individuals leave thousands, even tens of thousands of dollars on the table because they had no idea what they were eligible for,” St. George said.

There are multiple spouse-focused perks that the Social Security Administration offers. The three that tend to be the most important are spousal, survivor and divorced spousal benefits, St. George told The Independent.

Three benefit-boosting options for spouses

The Social Security office calculates an individual’s monthly benefit amount based on how much they paid into the Social Security system in their working years. Because of that, some spouses earn bigger benefits than their partners. This imbalance is what the following benefits are based on.

“Social Security gives you two doors, your benefit and your spouses, and the great thing is that you get to walk through the better of the two,” said Jacob Sadler, a senior advisor at wealth management firm Curio Wealth. “Social Security looks at both spouses’ earnings records and pays you the higher of the two amounts – your own benefit or the benefit you’d receive based on your spouse’s record.”

Spousal

Under the spousal benefit rule, a spouse can opt to take the greater of their current benefit ,or up to 50 percent of their spouse’s full benefit payment.

“This can literally be a 30 percent to 100 percent increase in income that the individual would not have earned if their record was not reported,” St. George said.

“Full benefit” is an important distinction. It’s the amount someone receives at “full” retirement age, which is usually 66 to 67 years old.

The 50 percent is not calculated using amounts below or above the full retirement amount, which can be the case for those who start payments before or after full retirement age.

Survivor

Tailored to widows and widowers, the survivor benefit allows a surviving spouse to take the higher of their benefit amount or 71.5 percent-100 percent of their deceased partner’s benefit, according to the Social Security Administration.

The percentage increases the longer the surviving spouse waits to retire. Rules also allow surviving spouses to receive their payments starting at 60, two years earlier than the typical early benefit period, Sadler said.

If they opt to receive payments at 60, their amount will be 71.5 percent of their spouse’s benefit. If they wait until full retirement age, they receive 100 percent of their spouse’s benefit, Sadler said.

“This is one of the largest income jumps a person may ever receive, but many people don’t think about this one until something happens,” Sadler told The Independent in an email.

There’s one catch that retirees need to know about this option, though: remarrying could end the benefit, Sadler said.

Divorced spousal

Retirees can receive a payment boost from a divorced partner if they were married to them for at least 10 years and have not remarried since.

“This one surprises people every time,” St. George said.

Like the spousal benefit, recipients can choose between the greater of their monthly benefit or 50 percent of their spouse’s.

Not only does the divorced benefit provide the possibility of a higher monthly payment, but an individual can apply for it without notifying their ex or reducing their ex’s benefit amount.

Important rules to know

While the payment amount for the various spousal benefits differs based on certain factors, there are some general rules they all share.

Primarily, a spouse can only use spouse-related benefits if their partner already started their Social Security payments.

Secondly, recipients have to apply for the benefit on their own; the Social Security office will not notify them of any special eligibility. St. George said.

“Here’s the part people don’t love hearing: Social Security doesn’t help you optimize this,” he said. “They will take your call and process the request if you reach out to them directly, but they don’t come knocking on your door.”

Potential recipients can apply for spouse-related benefits online, over the phone or in person. Applicants need to provide marriage or divorce documents, birth certificates and bank information, St. George said.

Surviving ex-spouses must set up an application appointment with the Social Security Administration, Sadler said.

“If done right, these benefits can turn a modest check into a meaningful one,” he said.