Q: A friend said there is a maximum Social Security amount payable to a family. Both my husband and I are employed. We will receive our own SSA retirement. Will our retirement amounts be limited because we are married?
A: Individual Social Security retirement benefits are not reduced because you are married. Your friend told a common SSA myth based on misunderstanding of a different topic. I will try to explain both today.
A popular variation of this question is to ask if there is a SSA marriage penalty. However phrased, the answer is no, Social Security does not have a marriage penalty. Individual Social Security retirement benefits to you and your husband are not reduced because you are married.
When receiving Social Security retirement from your own work, the amount for each of you is separately calculated based on your individual lifetime earnings records and age when starting benefits, not whether or not you are married.
You are two different people with separate Social Security records. Marital status is not considered when determining the amount of your own Social Security retirement amount. Individual SSA retirement benefits to one have no role in computing the individual retirement amount due the other. (Note: if one member of a couple earned low wages or was not insured for retirement benefits, he or she might receive benefits as a spouse. That is not the topic here.)
In SSA jargon, each of you is a number holder (NH) because you have a Social Security number (SSN). Benefits are computed based on the record of a number holder. You are the NH for SSA benefits on your work record and your husband is the NH for benefits on his. Your records are separate.
So, where does this myth come from? It is probably based on benefits payable to a family through the work record of one person (one number holder).
When you are the number holder (NH), your SSA amount is not affected by any family members, such as a spouse or child, paid through your work record. The NH receives the same amount whether or not any family members are paid on the record. However, the Social Security Act limits the amount of monthly benefits payable on any one record. This limit is the family maximum. The family maximum can proportionally affect Social Security amounts paid to family members on the NH’s work record. It does not affect NH benefits.
For example, a person, the NH, receives Social Security retirement or disability benefits. If enough family members are eligible on the NH’s record to reach the family maximum, it will affect amounts payable to them but not to the NH.
How much is the family maximum? Amounts vary with the type of Social Security benefit involved and work record of each number holder. For any given NH, the family maximum is approximately equal to 150 to 180 percent of his or her full retirement age amount. It usually is reached by the time three family members, not including the NH, are on the record. If reached, the amount payable to each family member is proportionately reduced. Benefits paid to a divorced or surviving divorced spouse based on disability or age does not count towards the family maximum amount.
Social Security does not have a marriage penalty. Being married does not reduce individual Social Security retirement benefits to you or your husband. For accurate Social Security information, go to www.socialsecurity.gov.