How to Maximize Social Security Retirement Benefits for Spouses

Handwerk Consulting |


Marriage affects various things, including how you should think about filing for Social Security.


Single individuals have fewer choices for receiving Social Security benefits than married couples. Spouses may begin receiving benefits at different ages and may be entitled to spousal benefits equal to up to half of their partner's benefits. People who earn significantly less than their spouses typically receive more in spousal benefits than they would have received based on their own work histories.


Combining your benefits with your spouse's benefits can help you get the most out of your Social Security income.


It may make sense for both couples to claim on the same spouse's earnings record in specific circumstances.


Many couples employ the "split technique," which they claim at different ages. It might be worth it for the higher earner to hold off on collecting for a while.


Spousal benefits are often higher than individual retirement benefits for many persons. This has always been the case for women, who may have worked fewer hours outside the home and been paid less than males for equivalent work.


However, making the most of Social Security necessitates some planning to take advantage of the fundamental benefit regulations. 


After you reach the age of 62, each year you delay accepting Social Security (until you reach the age of 70) could increase up to 8% in future monthly benefits. (Increases halt once you hit 70, so there's no point in waiting till then.) 


Members of a marriage may also claim benefits based on their work history or half of their spouse's benefit. If your earnings are significantly different from your partner's, claiming the spousal benefit may be preferable than claiming your own. 


Spousal Benefits


Once they reach full retirement age, those married for at least ten years can claim either their benefits based on their wages — or half of the former spouse's benefits, whichever is higher.


To maximize their overall benefits as a couple, the more significant earner can wait until 70 to file, while the lower earner can file at full retirement age.


Your payouts are unaffected if your ex-spouse is entitled to benefits based on your wages.


Survivor Benefits


Survivor benefits are another significant factor to consider when filing for Social Security. If you're single and make a mistake with your Social Security claim, you'll be the one who pays the price. However, if you're married, your decision may have long-term consequences for your partner. 


When one of the spouses dies, the survivor will only receive the greater of the two checks the couple was receiving, rather than both. On the other hand, Survivor benefits do receive delayed retirement credits, whereas spousal benefits do not. As a result, maximizing the advantage of the higher income implies the survivor will have more money to live on in the years ahead.


How to Claim Spousal Benefits


One option is to claim spousal benefits when you reach full retirement age, which will allow your own retirement benefits to grow. It can make financial sense for you to do this if the amount of your spousal benefits is not too much lower than your retirement benefits. You can later switch to your own retirement benefits, which will be 8% higher for each year you wait until full retirement age and remain so for the rest of your life (up to age 70).


The other option is to claim early due to health concerns.  Benefits begin at the age of 62, and your full retirement age (FRA) is determined by your birth year.


Couples who expect to retire sooner may wish to consider filing a claim sooner. In general, for the enhanced benefits from deferral to match the benefits foregone from 62 to 70, one member of a marriage would have to live into their late 80s. Couples who cannot afford to wait or who have reasons to plan for a shorter retirement may want to claim early. While a couple at age 65 can expect one spouse to live to be 85 on average, couples who cannot afford to wait or who have reasons to plan for a shorter retirement may want to claim early.


According to research, most people are better off deferring, but your case may be different. A Social Security claiming calculator can assist you in making your decision. The most crucial thing to keep in mind is making choices for two people, not just yourself. If you spend some time investigating your alternatives, the payback could be a more comfortable retirement for you and your spouse. 


If you need more information about what to do, give us a no-cost call. We can help you find the best strategy for both of you.