I can get 50% of my spouse’s Social Security benefit whenever I apply.
False – Even though a spouse is entitled to a spousal benefit, if you start collecting earlier than your full retirement age, you will not receive the full 50% benefit. So what is the reduced benefit? The benefit reduction is calculated as 25/36 of one percent for each month early you start collecting your benefit, up to 36 months. Additional months are further reduced by 5/12 of one percent. For example, let’s say your full retirement age is 66 and you want to start collecting your spousal Social Security benefit at age 62. If we assume the spouse’s benefit is $1,000, then the spousal benefit at full retirement age would be 50% of that amount, or $500. Then you will need to discount this amount by 36 months at 25/36 (or 33.33%) plus 12 months at 5/12 (or 4.99%). In our example, the $500 benefit would be further reduced by 38.32% (or $191.60). The final benefit would be $500 minus $191.60 (or $308.40).
It is never a good idea to draw a spousal benefit.
False – If you are at full retirement age and have a similar or higher wage history than your spouse, drawing a spousal benefit may be a great strategy. In this case you could begin drawing a spousal benefit at full retirement age, but then delay drawing your own Social Security benefit until perhaps age 70.
Social Security will alert you to any benefits you are due from a previous spouse.
False – One thing to remember when applying for Social Security is that you are eligible to draw a spousal benefit from a divorced spouse if you were married for 10 years and have not remarried. You will need to advise Social Security of any marriage that applies in the application process.