Spousal benefits are an important and frequently used Social Security resource. In some cases, so are retroactive benefits. Retroactive spousal Social Security benefits, however, are quite complicated. Anyone in this situation should meet with a financial counselor to review options.
Some of the major factors that could impact receiving these benefits are the life expectancy of the spouse and recipient, the age of retirement, family structure, and living expenses.
- Social Security spousal benefits pay a beneficiary's spouse in retirement.
- A retroactive benefit is a lump-sum payment of up to 6-months worth of Social Security benefits paid for late claimants.
- Spousal benefits may be retroactive, but only under certain limited circumstances.
Retroactive benefits are a one-time payment the Social Security Administration (SSA) can send to those who delay filing for retirement benefits for up to six months beyond their full retirement age (66 years old for many, 67 for those born in 1960 or later). In other words, those who file for benefits after their full retirement age can take a lump sum of up to six months of benefits. that occurred between your full retirement age and your filing date.
The lump-sum payment is appealing but comes with a stern condition: The benefit recipient's filing date is pushed back, creating a permanently lower monthly retirement benefit and survivor benefit, up to 4% less.
Spouses can collect Social Security in more than one way: based on their own earnings record, or as a spousal benefit that will provide half of the other spouse's benefit as calculated at their full retirement age. Spouses thus can collect Social Security based on their own earnings record, or as a spousal benefit that will provide half of their spouse's benefit.
A spouse eligible for benefits both as a retired worker and as a spouse (or divorced spouse) and who is not yet full retirement age must apply for both benefits. The SSA will pay the higher of the two benefits.
One common tactic to claim spousal benefits was known as file and suspend. One spouse would file at full retirement age and the other would claim spousal benefits on the first spouse's record. The first spouse then has Social Security to suspend his or her benefits. Both then accrued delayed retirement credits that increased their eventual monthly benefit—all the while collecting spousal benefits.
As part of the Bipartisan Budget Act of 2015, Congress eliminated file and suspend for those who turned 62 on or after Jan. 2, 2016.
How Spousal Benefits Can Be Retroactive
Certain circumstances do still allow for spousal benefits to be retroactive:
- A surviving spouse younger than full retirement age and who files for survivor benefits within one month of the worker's death can receive a month of retroactive benefits, starting with the month the worker died.
- A widow or widower who is under full retirement age may qualify for up to six months of retroactive benefits if the deceased worker claimed reduced benefits before full retirement age.
- Disabled widows and widowers, who are eligible to claim survivor benefits as early as age 50, can collect up to 12 months of retroactive survivor benefits if they claim survivor benefits before age 61.
The Bottom Line
Spousal Social Security benefits are retroactive. These benefits are quite complicated, and anyone in this type of situation is advised to sit down with a financial counselor to review options.