Social Security

How the Different Social Security Benefit Options Work for You

Social Security provides three key retirement benefits for families. Your "primary" benefit is what you earn by working and paying your social security taxes. If you are married or divorced, you can receive benefits based on your spouse’s work (and taxes). These are called spousal benefits. Finally, if you are a widow or widower, you can collect benefits based on your deceased spouse’s work. These are called survivor benefits.

Here is how Social Security determines eligibility and benefit amounts.

Primary Benefits

The original Social Security Act of 1935 established a national pension plan to provide financial security in old age. When you work and pay Social Security taxes, you are contributing funds to the program. When you retire, you withdraw funds from the program. The amount you receive is based on the amount of taxes you have paid and is called the "Primary benefit." The Social Security Administration has a complicated formula that determines your benefit each year.

To qualify for primary benefits, you must first contribute enough to social security. Each year you work and pay taxes into the Social Security system, the Social Security Administration issues you a "credit." In 2015, you’ll earn one credit for each $1,220 in earnings—up to four credits a year. Every year, the amount of money needed to earn one credit increases a little. Most people will need 40 credits (10 years of work where they earned more than $4,880) to qualify for benefits. Once you qualify and reach the age of 62, you can collect your primary benefit (although it pays to delay your benefits).

Spousal Benefits

After establishing Social Security in 1935, the government wanted to provide more support for married couples. Most families at that time had one earner. Upon retirement, a married couple would receive as much in benefits as an unmarried worker. The appropriate income for a single person was too little to support the couple.

In 1939, Congress expanded Social Security to cover spouses. In 1950 it was further expanded to cover divorced spouses as well. These expansions created the "spousal benefit." This benefit is paid to a spouse of someone who has contributed to Social Security. In most cases, the spousal benefit is half of the worker’s primary benefit.1

Typically, to qualify for spousal benefits, the worker in the family must first file for their primary benefit. Once the spouse reaches the age of 62, they can collect their spousal benefit (although it pays to delay your benefits). The eligibility rules for spousal benefits get more complex when divorced or disabled. You can learn more here.

Survivor Benefits

Another problem in the original Social Security law was its treatment of widows. In 1935, the sole earner in the family was usually a man. The law stated that when the worker who contributed to social security died, benefit payments should stop. Men tended to be older than their wives and have shorter life expectancies. So, many women would get cut off from benefits altogether when their husbands died.

The 1939 Social Security expansion covered widows as well. This created the "survivor benefit." This benefit simply transfers the deceased spouse’s payments to the surviving spouse. To qualify for a survivor benefit, you must have been married for 9 months and remained unmarried since your spouse died. Once you reach the age of 60, you can collect your survivor benefit (although it pays to delay your benefits)

  1. If you are eligible for your primary benefit based on your own work and either a spousal or survivor benefit based on your spouse’s work, the Social Security Administration will only pay you the larger one. Sorry, you can’t collect multiple benefits.