Big Changes Could Be Coming To Social Security Spousal Benefits

Social Security spousal benefits are getting a makeover in 2025, and will alter how recipients maximize their retirement income. One major update is the removal of a decades-old rule that allowed certain beneficiaries to strategically switch between their own earned benefits and those of their spouse. Under the current system, individuals who reach their full retirement age before Jan. 2, 1954, can file a restricted application. This approach enables them to claim only spousal benefits temporarily, while deferring their own retirement benefits, which continue to grow until age 70. This strategy has helped countless retirees boost their overall income over time. 

However, come 2025, the changes made to the act will go into effect and this option will no longer be available to everyone. The new Social Security rules are expected to simplify the process, and also ensure equitable benefit distribution. Additionally, an increase in cost-of-living adjustment (COLA) will be applied to Social Security benefits in 2025. There will be an increase of approximately $48 per month to help beneficiaries stay afloat, regardless of inflation, among other ways checks may get bigger. Going forward, most retirees must choose between claiming their benefits, or their spousal benefits without the option to switch later. It is crucial to carefully consider the timing and financial implications of filing for benefits. And if you qualify for both types of benefits, it's best to assess your circumstances and decide which option provides the greatest long-term value.

There will be a 2.5% increase to Social Security COLA (Cost of Living Adjustment), lower than the increase rates of the previous years, but it does still offer some financial relief for beneficiaries. This adjustment will see an increase of $49 to $50 per month to all retirement funds. Singles will receive a monthly benefit of $1,927 to $1,976, while eligible couples will get $3,014 to $3,089.

The maximum taxable earnings for Social Security taxes will also rise to the tune of $176,100. This means a worker who reaches a full retirement age (FRA) earns $3,822 to $4,018. Spousal social security benefits are heavily dependent on the earnings of the primary worker, but disabled workers with dependents receive $2,757 to $2,826.

The projected earning differs between a bereaved spouse that lives alone and one with dependents. Whereas, a widow or a widower is entitled to $1,788 to $1,832, the widowed mothers with children get benefits increase from $3,669 to $3,761​ per month. These increases are a result of Social Security working hard to provide stability to millions of Americans. All beneficiaries are encouraged to review the updated amounts, and also incorporate them into the financial plans for next year.

There is more. The Bipartisan Budget Act of 2015 simplified and altered Social Security rules, ending two options that allowed couples to improve their benefits: file-and-suspend and restricted application, making sure the government create a fair consistency among claimants. Individuals already using these strategies or who meet the accepted age can still abide under by old rules.

This means they still have some amount of access to a unique option within Social Security's spousal benefits. It allows them the possibility to file a restricted application, which can only be done at their full retirement age. For those born after Jan. 2, 1954, spousal benefits function differently. Social Security will automatically pay the higher amount of the benefits and this can only be claimed by those who are qualified and flexibility to optimize benefits by alternating claims is not an option. Still, younger filers are allowed to decide when to make their claims.

There's a need to understand spousal benefits and how they interact with an individual's retirement plan. Older beneficiaries who qualify for the restricted application option should review whether using it aligns with their financial goals. Beneficiaries should also evaluate their eligibility, financial needs, and long-term goals when deciding how to claim Social Security benefits. If you are still confused, consult a financial advisor, but not before checking out these 10 tips for choosing a financial advisor. You can also use any of the Social Security Administration's tools available.