Can a Wife or Husband draw from the other's Social Security benefits?
Yes. Let's look at a few different situations. Note that we have no intent to be sexist but to make these examples clear, we have assumed that the husband has earned more than the wife.
Wife has never worked with example
Your current wife cannot receive the husband's benefits until the husband files for retirement benefits. Remember that if you have not reached your full retirement age, your benefits are reduced. Here is the table showing reductions if you have not reached your full retirement age.
Mary has never worked. Her husband John has worked continuously and has always earned the maximum salary subject to social security taxes. His benefit at full retirement age is $20,000 (a hypothetical number for this example). John was born in 1949 and his full retirement age is age 66. John and Mary are both currently 62. If John starts his benefits now, he will not receive $20,000 annually. He will receive a reduced benefit for taking early SS. He will not get $20,000, he will get 25% less, or $15,000 annually. But if he starts his benefits now, Mary can also get benefits now per the schedule below. She would get $7,000 annually ($20,000 x 35%).
• If full retirement age is 65, a spouse can get 37.5 percent of the worker's unreduced benefit at age 62;
• If full retirement age is 66, a spouse can get 35 percent of the worker's unreduced benefit at age 62;
• If full retirement age is 67, a spouse can get 32.5 percent of the worker's unreduced benefit at age 62.
Wife has never worked, is older than Husband
Same example as above except that Mary is 66 and John is 62. John files for Social Security and so does Mary. John gets a reduced benefit of $15,000. Mary will get 50% of John's FULL benefit as she has reached full retirement age. She will get $10,000 (50% of $20,000) annually.
Both Husband and Wife have worked with example
Same situation as above except that Mary has worked. Based on her earnings, her benefit at full retirement age is $8,000 (a hypothetical number for this example). In this case, the couple can do the following:
a) Mary starts her benefits at age 62 and receives $6,000 annually ($8,000 less 25% for starting benefits early). John does not start his benefits.
b) Mary starts her benefits and age 62 and so does John. Mary gets the higher of her own benefit ($6,000) or her spousal benefit (35%$7,000). John, the husband, gets $15,000.
Note that the wife's benefits will not decrease the husband's benefit. In fact, the value of the benefits the wife receives, added to the husband's benefits, may help the husband decide if taking benefits early might be beneficial. In this case, we see that by taking benefits early, John gives up $5,000 annually but doing so enables Mary to get $7,000 annually.
Both Husband and Wife has worked with example, Wife is Older
Same situation as above except that Mary is 66 (her full retirement age) and John is 62. Based on her earnings, her benefit at full retirement age is $8,000 (a hypothetical number for this example). In this case, if John files for Social Security, he gets $15,000 annually. Mary, because she has reached full retirement age, will get half of his FULL benefit and will get $10,000 annually (50% x $20,000) as it is higher than her benefit ($8,000).
In future posts, we will cover additional examples of ways that husband and wife can maximize social security benefits. This other post covers how to pay less social security tax on your benefits.