Learn the options about spousal Social Security benefits

Most people know that they may be eligible to receive Social Security benefits in retirement, based on their work earnings record. Social Security is normally available as early as age 62, but the longer you delay, your benefit increases — until age 70. Did you know that you could be eligible for benefits based on your spouse's earnings record — even if he or she is deceased or you have divorced?

Qualifying spouse

You may be eligible to receive up to one-half of your spouse's benefit, even if you have never worked. Generally, if your own benefit is less than half of your spouse's benefit, you may opt to apply instead for spousal benefits to get the higher amount. Note, this strategy is only available if the higher-earning spouse is already taking his or her Social Security benefit.

For example, husband age 67 just started receiving his benefit of $2,400/ month and now wife, also 67, wishes to apply. Her own benefit is $800/month.

Wife can instead apply for a spousal benefit and receive about $1,200/month. Note, if either spouse begins taking benefits early or is still working, the benefit amount could be impacted.

Surviving spouse

Widow or widowers can receive benefits as early as age 60 (age 50 if they have a disability) — and have the option to apply for survivor benefits and delay their own retirement benefit until later. For example, your husband was receiving Social Security and recently passed away. You are 66 (born 1956) and about to apply for benefits. His benefit was $2,400, but your own benefit would be $3,000. If you don't need that much income right away, you may apply to receive a survivor benefit of $2,400 now, while allowing your own benefit to grow until age 70 — the latest age for delay credits — and then switch to your own benefit which would have grown to $3,879.

If the widow/er remarries after age 60, the remarriage will not affect eligibility for survivors' benefits, although, if the new spouse is eligible for a higher benefit amount, it may be better to eventually apply for regular spousal benefits if it is higher than the survivor benefit amount.

If you and your spouse are both receiving benefits, when one spouse dies the surviving spouse will continue to receive just one benefit — the higher amount. This eventual loss of income should be accounted for in your overall financial planning.

A widow/er of any age who is left caring for the deceased's child under the age of 16 — or has a disability — can also receive benefits. Other surviving family members may also qualify for benefits.

Unlike regular Social Security, survivor benefits cannot be applied for online. For regular Social Security, you can view your benefits by visiting www.ssa.gov and going to "My Social Security" to establish your account and set your amount.

Divorced spouse

A divorced spouse generally can qualify if he or she is currently unmarried, age 62 or older and was married to the ex-spouse for at least 10 years — as long as they are divorced for at least two years prior to applying. The amount received would be similar to the qualifying or surviving spouse scenarios described above. Claiming the divorced spouse benefit has no effect on the ex-spouse's benefits (nor their spouse's if they have remarried.) As with all Social Security benefits you may not collect multiple benefits, only the highest amount that you are qualified to receive.

Claiming strategy

Choosing your unique Social Security claiming strategy is an important personal decision that requires careful research and planning. In formulating your long-term investing strategy, we take into consideration other sources of income including Social Security. If you would like assistance in evaluating your retirement income options, The Trust Company can help. ¦

— The Sanibel Captiva Trust Company is an independent trust company with $3.6 billion in assets under management that provides Family Office and Wealth Management Services, including investment management, trust administration and financial counsel to high-net-worth individuals, families, businesses, foundations and endowments. This information is not intended to be and should not be treated as legal advice, investment advice or tax advice. Readers, including professionals, should under no circumstances rely upon this.