Social Security: Why Spouses Need to Be Careful Before Applying for Benefits

The Social Security program is great for many reasons, one of which is that it provides benefits to both a retired worker and the worker's spouse, regardless of whether the latter worked outside the home. But there's one catch spouses need to be aware of.

As with the primary beneficiary, the size of a spouse's monthly benefit is determined in large part by when the spouse chooses to receive it. If they elect to receive benefits at 66, they're entitled to the maximum share, or half the retired worker's benefits. By contrast, if they receive them early, then their monthly check is docked by a set amount for each month prior to full retirement.

But while this is similar treatment to the primary beneficiary, the catch is that spouses are hit harder for applying early. The table below illustrates this by laying out how much a spouse's monthly check is reduced depending on when he or she applies for benefits.

As you can see, the reduction is greater for a spouse than for a primary beneficiary. As Motley Fool contributor John Maxfield discusses in the video below, the net result is that spouses should be particularly mindful about choosing when to apply for benefits.

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