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Dispatches

Knowledge of Social Security Spousal Benefits Is Low

The lack of knowledge about Social Security spousal and survivor benefits can put even otherwise financially literate individuals at risk for making suboptimal claiming decisions.

by AAII Staff | March 2019

Knowledge about spousal and survivor benefits is low among those who have yet to start receiving Social Security benefits. The lack of knowledge can put even otherwise financially literate individuals at risk for making suboptimal claiming decisions.

Social Security offers two types of benefits that spouses can be eligible for beyond claiming on their own earnings record. The spousal benefit allows a married individual to claim Social Security benefits based on their spouse’s earnings record if higher than their own earnings record. The survivor benefit is equal to the full amount of the deceased spouse’s benefit, if it is larger. The amount of the survivor benefit that the spouse with the lower benefit can receive is affected by the higher-benefit spouse’s age at the time of the death. (Divorcees can receive spousal and survivor benefits if certain requirements are met.)

Representatives from the University of Michigan Research Center conducted a study to test knowledge of spousal and survivor benefits. The team created two focus groups based on whether the participant was the household’s primary or secondary earner. Awareness of Social Security benefits was low in both groups. Compared to the primary earner group, the secondary earner group was more familiar with spousal benefits. Also, participants in the secondary earner group said that they only had some knowledge about Social Security.

Based on the focus group discussions, a survey was constructed and sent out. Knowledge about eligibility or how benefits are calculated was low among the approximate 1,400 eligible respondents. For example, just 27% of study participants correctly said that spousal benefits are available to couples married for a year or more. Less than 40% knew that claiming spousal benefits doesn’t affect the primary beneficiary’s benefits or were aware that spouses cannot claim benefits before the primary beneficiary does. Out of five questions designed to test participants’ knowledge about spousal benefits, the average respondent answered 1.65 questions correctly. The study’s authors suggest, “this result is driven by those with low financial literacy, low familiarity with the Social Security retirement program, in general, or low confidence in the Social Security system.”

Source: “Social Security Household Benefits: Measuring Program Knowledge,” Katherine G. Carman and Angela A. Hung; Michigan Retirement Research Center Working Paper, September 2018.

Discussion

Suzanne Benton from CT posted over 7 years ago:

1. The Social Security Office is lax on giving divorced women full information. You bring up the issue of women not knowing their rights, so please write a complete article to explain them thoroughly. For example, upon the death of a former spouse, it is my understanding that the divorced wife receives her former husbands full benefit. However, when I called SS to ask about this, the woman said, only as of his age 65. Does that mean she received only that paltry sum he received a age 65, and this even though the man lives well into his 80's? No answer from SS as the woman employee made a hasty exit from the phone call. Please spell out this issue clearly for wives and ex-wives and do not add to sexist patterns that keep excluding the needs of women.


Suzanne Benton from CT posted over 7 years ago:

And, also to say that it took some doing to get to this comment page. I request that you work to streamline this process.


John Marple from WV posted over 7 years ago:

Social Security is lax on giving information to anyone! My wife tried to obtain information on two different issues. It took several months and repeated calls to receive the information she requested on her benefits or spousal benefits, as well as, medicare enrollment. BTW - since she was not in their 'system', she could not use their prefered 'user friendly' electronic internet service, forcing her to call. Some 'calls' with wait times lasting for hours.


ClarenceMiller from VA posted over 7 years ago:

There is one question I have about spousal benefits. My wife is a retired federal employee, receiving annuity pay thru the Federal Employee Retirement System. If she receives my Social Security benefit upon my death, is there an offset because of her federal retiree pay?


James McGlynn, CFA, RICP from TX posted over 7 years ago:

Some facts on Social Security for spouses and divorcees: Most important fact: to qualify for spousal or survivor benefits the marriage must have endured 10+ years. (9.5 years qualifies for zero!) Spousal benefits (up to 50% of ex’s benefits) if the ex is still alive. Minimum age to qualify for spousal benefits is age 62 but would only be 32.5% of worker Full Retirement Amount versus 50% at your Full Retirement Age. Lose spousal benefits on the ex if you remarry. (Unless that new marriage ends). Survivor benefits (up to 100% of ex’s benefits) if the ex is deceased. Minimum age to qualify for survivor benefits is age 60 but would only be 71.5% of worker benefits versus 100% at your Full Retirement Age. If remarry before age 60, do not receive survivor benefits on ex., but if remarry AFTER AGE 60 can file for survivor benefits on the ex. If multiple marriages of 10+ years, can choose which ex to file on. Keep track of an ex-spouse if married 10+ years for 2 reasons: ability to file for spousal benefits or survivor benefits. If you do not file for spousal benefits it is unlikely that the Social Security Administration will notify you to file for survivor benefits which may be decades in the future. Free spousal loophole. If born before January 1, 1954 you may file for restricted spousal benefits at Full Retirement benefits and later file for your own worker benefits at age 70 to possibly maximize your benefit. This loophole is unavailable for those born after January 1, 1954.


James McGlynn, CFA, RICP from TX posted over 7 years ago:

My CPA has asked me to help with his clients' SS questions. When professional CPA's scratch their heads about the intricacies of Social Security you KNOW there is a problem with it.


J Garstick from MO posted over 7 years ago:

My wife is a retired teacher,a member of MRTA (Missouri Retired Teachers Assoc.),and her pension is through them. MO at the time of her retirement (2011) was one of 4 states at that time where she was/is not entitled to Federal Social Security beneficiary benefits upon my death. MRTA in 2011 said they were working to get that changed, but still no tangible results. Would appreciate some further insight to this condition as it seems unconstitutional that she should not receive benefits on my earnings' benefits that I've been paying SS taxes for my working life. I'm still employed and past full benefit qualifications, and have been married to her for nearly 47 years.


Charles Rotblut from IL posted over 7 years ago:

Clarence, Regarding your wife, I would make an appointment with the local Social Security office and speak to them. -Charles


M Freeland from SD posted over 7 years ago:

You make the point as does the study cited that knowledge of SS spousal benefits is low. That may be true, but neither AAII or the SS Administration help in educating the public. Let me present a situation. Person born in 1951, married 28 years and divorced for 12. Still employed and intends to work until age 70 or beyond. Former spouse just turned 62. Individual is 67. Can individual file a restricted application for spousal benefits? What percentage of the spouse's benefit does individual receive, if any? Since individual is still employed with medical coverage, is there a requirement to enroll in Part B medicare as an annuitant. Further, I resent the implication of financial illiteracy in relation to the topic when information is opaque and seems to be so intentionally. AAII used to be dedicated to financial education. Now it seems the mission is to sell stuff.


Charles Rotblut from IL posted over 7 years ago:

M, We have published several articles about Social Security, all of which are available in our archives. A good example is a three-part series we ran in 2013. The third one Social Security Strategies for Couples includes links to the prior two in the series. -Charles


Michael from Stanton posted over 7 years ago:

Charles Rotblut: Thank you for the link ("Social Security Solutions for Couples"). After speaking with our financial advisor, a couple years ago, I filed for, and currently receive, "Resricted Benefits" while my wife receives "Full Benefits." The application for "Restricted Benefits" was surprisingly seamless thanks to a very knowledgeable/competent Representative at our local SSA Office (how lucky were we?). *NOTE: Baby boomers turning full retirement age in 2019 are the last class that can take advantage of this valuable Social Security strategy.


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