Social Security Tips for Couples in Different Situations

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Filing for Social Security benefits may seem like a straightforward proposition. As soon as you retire, you simply claim your benefits and live off that income in retirement. Unfortunately, there are at least two flaws with this scenario. First, Social Security benefits are not meant to fund an entire retirement lifestyle, and second, when you file can have a huge impact on how much money you actually receive. Toss in the variable of a spouse as well and your Social Security claiming strategy can become complicated fast.

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Although speaking with a tax or financial advisor is always a solid idea before you make such an important decision, here are some tips regarding Social Security filing strategies for couples in different situations.

Basic Principles of Filing for Social Security

Before you can choose which strategy is best for you, you’ll have to understand how Social Security payouts work. In a nutshell, your benefit is determined based on your “full retirement age,” which for most retirees is now 67. You can claim benefits as early as 62, but your monthly check will be reduced significantly. You can also choose to defer benefits until age 70, which will increase your payout by 8% for each year between 67 and 70 — or 24% in total. As a couple, you should also keep in mind that spouses are entitled to the higher of their own benefit or 50% of their higher-earning spouse’s. Survivors are also eligible to continue receiving the higher of their own benefit or that of their deceased spouse.

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Now let’s look at different situations and how to handle claiming benefits.

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The Couple Is Roughly the Same Age

Ideally, when spouses are roughly the same age with approximately the same life expectancy, it makes sense for both to defer claiming benefits as long as possible. This can greatly maximize the joint benefits that the couple receives. However, this strategy should be modified based on the needs of the couple. While the highest possible payout will be received if both spouses wait to file until age 70, some couples can’t afford to defer benefits that long. In that case, having one spouse file early while the other defers their claim could be a compromise that provides immediate income while still maximizing benefits as much as possible.

One Spouse Had a Shorter Work Career

If one spouse will receive significantly less in Social Security benefits than the other, it pays to maximize the amount received by waiting as long as possible to file. This is particularly true if one spouse doesn’t even have the required 40 quarters of coverage to qualify for Social Security, or if their work record is less than the 35 years that the Social Security Administration uses to calculate benefit amounts. In this scenario, the spouse with the shorter work career may only have a minimal benefit, if any at all, meaning the working spouse will have to shoulder the burden for both of them in terms of Social Security benefits. 

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One Spouse Has a Shorter Life Expectancy

When one spouse dies, the survivor has the right to claim the higher of their own Social Security benefit or that of the deceased’s. In order to maximize the benefit of the surviving spouse, it makes sense for the higher-earning spouse to defer claiming Social Security as long as feasible. This will increase the higher earner’s benefit, and consequently the surviving spouse’s benefit as well, whether it is taken as their own or as a survivor’s benefit.

The Bottom Line

Part of the reason that filing for Social Security “correctly” can be difficult is that there are so many individual scenarios. Although the above tips are good guidelines for various situations, there is no one “right” answer that applies to every couple filing for Social Security. 

Ultimately, the factors you should consider when choosing when to claim Social Security are your anticipated life expectancy, the various earnings and benefit levels of each individual spouse, and your financial ability to withstand deferring benefits. 

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In other words, if you’ve got enough savings to live comfortably until you both reach age 70, it only makes sense to defer Social Security that long to maximize your joint benefits. But as this isn’t typically the case for most couples, you’ll have to identify the particulars of your own financial situation and adapt your strategy accordingly. Working with a tax or financial advisor is a good way to help ensure that you don’t overlook any important variables.

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About the Author

After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.
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