How to Maximize Social Security Spousal Benefits (Even if you Collect Your Benefit Early)

A single misunderstanding about Social Security spousal benefits can cost couples thousands over retirement. This episode unpacks the real math behind how Social Security treats spouses, ex-spouses, and survivors, so you can make smart claiming decisions that protect both cash flow and long-term security.

Listen to learn how the spousal benefit actually works: it’s based on 50% of the primary earner’s full retirement age benefit, not when they file. We walk through clear examples showing who qualifies, how marriage length and divorce rules apply, and when a lower earner can switch from their own benefit to a larger spousal amount.

James also separates spousal from survivor benefits—because they’re not the same thing. Survivor checks can reach up to 100% of what the deceased earned, which makes timing even more critical for the higher earner. You’ll hear how early filing, delayed credits, and coordination with 401(k) withdrawals or Roth conversions all play into your bigger retirement income plan.

The goal: help couples see Social Security not as a guessing game, but as one of the most flexible (and misunderstood) tools for creating reliable income.

If you’re planning around two benefit records, a stay-at-home spouse, or a late-career divorce, this episode will clarify your options and help you avoid the traps that quietly shrink your lifetime income.

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Episode Transcript

SPEAKER_00 (00:00):
A couple of years back, I was talking to a
prospective client, and thisprospective client was coming to
me with some retirementprojections, showing me how he
thought he and his wife were ina position to retire.
What he said though didn't seemto make a whole lot of sense.
So I dug into his projections,and what I quickly realized was
that his numbers were so offbecause he was failing to
correctly account for SocialSecurity spousal benefits.

(00:20):
Social Security by itself isrelatively straightforward to
calculate, but how does aspousal benefit work?
That's the topic of today'sepisode, because if you don't
get this number right, you mightdramatically over-project or
under-project how well you mightbe funded for your own
retirement.
A big part of this questioncomes from a listener.
A listener asked this.
He said, I'm 52 years old and mywife is 50.

(00:40):
We are planning our retirementstrategy, which will consist of
a combination of employer 401k,Roth IRA, investments, and
social security, but I need someguidance to determine the
optimal age for my wife and I tobegin drawing from Social
Security.
My wife is a stay-at-homemother, so will not be eligible
for her own individual benefitand will be planning to take the
spousal benefit.
My primary insurance amount atage 67 is$3,654, but I was

(01:05):
planning to begin collectingSocial Security at 62 to reduce
the draw from my retirementaccount.
So my reduced benefit at 62would be$2,540.
For the spousal benefit, Iunderstand that my wife's
maximum benefit is 50% of myfull retirement benefit.
However, if I retire prior to myfull retirement age and my wife
waits until her full retirementage is 67, would she still be

(01:28):
eligible for my 50% of fullretirement age benefit, or would
she be limited to 50% of myreduced benefit?
So this question comes from alistener named Rob.
Rob, thank you for thatquestion.
I am going to answer itdirectly, but then I'm going to
give you a more full context tosee how does this decision
impact you and what are theother important things to know?
So the short answer is no.

(01:49):
It does not depend upon when youcollect your social security
benefit.
If your full retirement age is67 and you collect at 62, your
spouse, Rob's wife, is stilleligible to collect a full
spousal benefit, equal to halfof his benefit at Rob's full
retirement age.
So this is the good news for allof you watching.
If you are collecting yourbenefit early, your normal

(02:10):
benefit early, your spouse canstill collect their full spousal
benefit, which is equal to 50%of your benefit at your full
retirement age at that point, atthe point that they turn their
full retirement age.
Sorry for the word salad there.
On the flip side, let's assumethat you defer your own benefit
until age 70.
So if your full retirement ageis 67, you wait three years for

(02:32):
delayed retirement credits tokick in, your benefit increases,
your spousal benefit or yourspouse's spousal benefit does
not also increase with that.
It is still anchored to thatprimary insurance amount, which
is the amount that you areeligible at your full retirement
age, they are eligible for halfof that.
So that's the short answer.
That's the direct answer.

(02:52):
Now let's look at a little bitmore context here.
So for those of you going intothis, have the full picture so
that you can base your decisionon the right information.
The first thing that you need tounderstand is whether you want
to collect your own benefit orwhether you want to collect a
spousal benefit.

So here's the thing (03:06):
in order to be eligible for any benefit, you
must have completed 40 quartersof work over the duration of
your working lifetime.
For 2025, one quarter of workequals$1,810.
So it's not actually a timething.
You don't actually have to workfor three months, but if you
earn$1,810, that counts as onequarter of work.
If you earn in this year over$7,240, that counts as four

(03:31):
quarters of work.
It doesn't matter how manymonths of the year you actually
worked, paying into SocialSecurity that amount qualifies
you for four quarters.
Now you cannot earn any morethan four quarters in any
calendar year.
So if you earn five times thatamount, it doesn't mean that you
get five times four quarters.
You're capped at four for theyear.
But anyways, over the course ofyour working lifetime, if you
accumulate more than 40quarters, if you have paid into

(03:53):
Social Security, 40 quarters ormore, you're eligible for a
Social Security benefit.
Eligible does not mean you'vemaxed it out.
To max it out, you need to payin a whole lot more than that,
but you are now eligible.
So when it comes to yourretirement years, how does this
play into account?
For the most part, at least onespouse has at least that amount
of earnings before they retire.
It's going to be very difficultto retire if at least one of you

(04:16):
does not have that amount.
However, what about when onespouse did not work?
What about when one spousestayed home and raised the kids?
What about when one spouse wasself-employed and they didn't
really have much in earnings topay into Social Security?
That's where the concept of aspousal benefit comes in.
So you can look at your ownearnings record and say, did I
even qualify for a benefit?
And if so, how much?
Versus how much did my spouseearn and what benefit are they

(04:38):
eligible for at their fullretirement age?
So that's the decision point.
Now, in order to be eligible fora spousal benefit, you must have
been married for at least oneyear.
So if you just got marriedyesterday, you're watching this
video on your honeymoon, numberone, probably go do something
more fun.
But if that's you, you're notyet eligible for a spousal
benefit.
To be eligible for a spousalbenefit, you must have been
married for at least one year.

(04:59):
So come back to this video in364 days and you can see this is
what you'd be eligible for, butit's not until you've been
married for at least one year.
Now, for those of you that havebeen married and divorced, if
you are married for at least 10years, you are still eligible
for spousal benefit.
So let's say you're marriedbetween the ages of 25 and 35,
but you've been single eversince.
Well, you're turning 65, 66, 67.

(05:21):
You are still eligible for aspousal benefit based on your
ex-spouse's earnings record,even if you haven't talked to
this individual in 30 plusyears.
It's not that you're currentlymarried that qualifies you.
It's if you've been married forat least one year to your
current spouse, or if you werepreviously married for at least
10 years, you are now eligiblefor a spousal benefit based on

(05:42):
that spouse's earnings record.
Now there are some details herewhere if you get remarried after
a certain age, it can actuallyimpact your spousal benefit.
So be careful of that, bemindful of that.
But these are the general rules.
And now finally, in addition tospousal benefits, there's also
survivor benefits.
So survivor benefits aredifferent.
Survivor benefits are what youare eligible for if your spouse
passes away.

(06:02):
Or similar to the last example,if your ex-spouse that you were
married to for at least 10 yearshas passed away.
So the survivor benefit isdifferent than the spousal
benefit, and that a spousalbenefit is limited to 50% of
what your spouse's fullretirement age benefit is, what
their primary insurance amountis.
A survivor benefit could be 100%of what your spouse was

(06:24):
collecting or was eligible tocollect prior to passing away.
So both of these very much comeinto play when designing the
optimal retirement strategy,because if you understand how
this works, you can reallymaximize your benefits, not just
to your favor in terms ofmaximizing income, but also use
this information to protect asurviving spouse to make sure
their benefit or their income ismaximized well after you're

(06:45):
gone.
Now I want to go through acouple of examples that tie back
to the original listenerquestion so I can quantify and
show you what this actuallylooks like.
Let's assume that if I retire,my primary insurance amount is
$2,000 per month.
So I retire and I turn$70, I cancollect$2,000 per month, which
means let's assume that my wifestayed at home and raised our
children and she doesn't haveany social security earnings

(07:07):
record.
She could either choose tocollect zero, not good, or she
could collect half of mybenefit.
And if my benefit is$2,000, shewould then get$1,000.
Now let's assume that I turn$67.
And you know what, I've watcheda whole bunch of YouTube videos.
I know that if I keep waiting,if I keep deferring, my benefit
will go up each year until theage of 70.
In fact, if I wait till 70, mybenefit will be closer to$2,500.

(07:30):
Not exactly, but rounding hereto use some simple numbers.
So at$2,500, does that mean thatmy wife is now eligible for half
of that?
$1,250?
The answer is no.
She would still be capped atthat$1,000 benefit eligibility
because that was my benefit atmy full retirement age.
That's considered my primaryinsurance amount.

(07:51):
So if I'm waiting, I canincrease my benefit via delayed
retirement credits, but spousalbenefits are not eligible for
those delayed retirementcredits.
Now let's give one more exampleto reiterate what I stated
before.
If I can collect my benefit at67 of 2000 and I decide to
collect early, my benefit mightbe reduced to, let's say,$1,500.

(08:11):
That does not mean that mywife's benefit is automatically
reduced to half of$1,500, whichwould be$750.
Her benefit, assuming she stillwaits until her full retirement
age, she is still eligible forthat full$1,000, which is the
good news.
So her spousal benefit is notdetermined based upon when I
collect my benefit.

(08:31):
It is determined based upon whatmy benefit is at my full
retirement age.
But outside of that, it's herdecision of when she collects
that actually determines howmuch more or less than that she
will receive.
Now, two very importantfollow-ups to this.
Number one, in order for my wifeto be eligible to collect her
spousal benefit, I must becollecting my benefit.
So if I go back to that example,if I turn 67, I could collect

(08:54):
2,000 per month.
But I say, you know what, if Iwait till 70, that can go closer
to$2,500 per month.
I'm gonna do that.
Well, each year that I delay,well, my wife's not actually
eligible to collect her benefituntil I have begun collecting
mine.
So let's assume we're the exactsame age.
We both turn 67.
She wants to collect her$1,000of spousal benefit.
I want to continue acceptingdelayed retirement credits to

(09:17):
get all the way up to$2,500.
I can do so, but she's noteligible to collect that$1,000
per month until I havecollected.
So by me waiting, that might bethe right call, but keep in mind
that could impact your spouse.
And that's where some goodplanning comes in.
Does it make sense to delay ordoes it make sense to collect
early?
Because now both of you cancollect those benefits.

(09:37):
Now, another detail that seemspretty nuanced and almost
irrelevant, but actually mattersis this.
We know the max spousal socialsecurity benefit is limited to
50% of the primary earner's fullretirement age amount.
So going back to me, my wife'smaximum spousal benefit will be
limited to 50% of what I ameligible for at my full

(09:57):
retirement age.
But technically, what she iscollecting at that point is her
own benefit plus any excessspousal.
And the combined amounts thereare capped at half of my benefit
amount.
That sounds incrediblyconfusing.
Let me use an example to explainhow that works.
Let's assume that my wife, whois staying at home and she is

(10:17):
raising our children, let'sassume she goes back to work
after that and she worked priorto raising our children.
Well, she might have a socialsecurity benefit.
She qualified by paying in the40 quarters, but it might not be
an incredibly high amount.
Let's assume it's$600 in thisexample.
So she could collect, based onher own earnings record,$600.
Now, if at age 67 we both begancollecting, I start collecting

(10:41):
$2,000, she collects her$600,but she's eligible for a spousal
benefit of$1,000.
Really, what that means is$600of her own benefit plus an
excess spousal benefit of$400that gets her to$1,000 total.
Why does that matter?
That doesn't seem like who caresif it's her benefit, if it's
excess spousal, it's stilllimited to that$1,000.

(11:02):
Well, it matters for thisreason.
I mentioned before, if we bothturn 67 and she wants to
collect, but I decide to deferuntil 70, well, she's out of
luck.
She can't collect a spousalbenefit until I have collected
mine.
But here's the thing she couldcollect her benefit of$600 per
month in this example, all whileI continue to delay until age

(11:23):
70.
Then once I turn 70, I turn onmy benefit of$2,500 per month at
that point, she is eligible forthe excess spousal at that
point.
That tops her off another$400per month, which brings her to
$1,000 total.
So this seems like nitpicking,this seems like splitting hairs
here, but that's the reality.
That's three additional years ofan extra$600 per month that she

(11:46):
wouldn't have otherwise receivedif she didn't understand how the
actual spousal benefit is acombination of her own earnings
record plus excess spousal, thecombination of the two being
capped at 50% of what I'meligible for at my full
retirement age.
All right, one final detail herearound spousal benefits before
we wrap up with a summary ofeverything you need to know to

(12:06):
make the most of these benefitsin your own plan.
With spousal benefits, tomaximize them, you need to wait
until your full retirement age.
So I'm going to go back to me asan example.
If my wife wants to maximize herspousal benefit based on my
earnings record, she would needto wait until age 67 to do so.
However, she is eligible tocollect earlier than then.

(12:27):
But in the same way that if shewere to collect her own benefits
early, those benefits arereduced.
The same thing applies withspousal benefits.
Yes, the max is age 67 or fullretirement age, and it can't go
higher than that.
Unlike your normal benefitthat's eligible for delayed
retirement credits, spousalbenefits are not.
So the max is 67 or fullretirement age, but it's

(12:47):
declined or it's reduced by thesame exact amount that your
regular benefit would be if youcollect early.
The way that works is for thefirst three years leading up to
your full retirement age.
So in this example, between age64 to age 67, your benefit is
reduced by 8.3% per year forthose three years.
That actually breaks down into amonthly number.

(13:07):
Social Security calculates thatamount monthly, not yearly, but
that's the total amount over thecourse of the year.
For ages 64 to 62, so anyamounts longer than three years
prior to your full retirementage, there's a 5% annual
reduction.
Once again, that's calculatedmonthly.
So 512ths of 1% is the reductionthat you would get any months

(13:28):
prior to 64 that you collectearly.
Same thing applies to spousalbenefits as it does to your
normal benefit that you'd beeligible for based on your
earnings record.
So here's the takeaways that Iwant to leave you with.
And I'm also going to leave youwith a video that actually shows
you how this information tieinto your overall plan.
So you're not just maximizingsocial security in a vacuum,
you're maximizing it in thecontext of everything else.

(13:49):
Number one, determine if yourspousal benefits are even the
best option.
Going way back to the listenerquestion, he is 52, his wife's
50.
Does a spousal benefit makesense?
Or given that she has a decadeand a half until she's eligible
for her full amount, does she goback to work at all?
Does she increase her earningsrecord?
That's largely going to bedriven by how much of an
earnings record she alreadyhave.

(14:09):
And is it worthwhile to go backand increase that a bit?
Or does it make more sense justto collect the spousal benefit?
But understand how both workspousal and your normal benefit
to see which one makes mostsense for you.
Number two, your spouse canmaximize their spousal benefit
simply by waiting until theirfull retirement age.
It does not matter if youcollect at age 70 or 62 or

(14:31):
anywhere in between.
Their decision is the only thingthat's going to impact the
amount of spousal benefit theycollect, the timing of that.
If they collect at 67 or theirfull retirement age, they get
the full amount.
If they collect sooner, they geta reduced amount.
Number three, understand thatthe spousal benefit is actually
the combined amount betweenone's own earnings record and
excess spousal benefits.

(14:52):
The combination of those two iscapped at 50% of the primary
worker's primary insuranceamount, but it's the combination
of those two things that adds upto that.
Seems like it's splitting hairs,but as we saw, this can actually
lead to thousands of extradollars that you receive if you
know how this impacts you.
And then finally, number four,maximizing social security

(15:13):
income is far different thanmaximizing the impact of Social
Security on your overall plan.
When you start to actuallyunderstand the way Social
Security is taxed, howcollecting early impacts your
portfolio withdrawals or thelack of portfolio withdrawals,
understanding how this all fitstogether is actually where the
magic happens.
So I walked through a videoright here.
You can see a link to it where Iillustrate the impact of pulling

(15:36):
Social Security early later, andwhat impact does that have on
your overall retirement plan.