There are strategies available that can help married couples increase their Social Security benefits when they retire. This article explores a few such strategies. You are encouraged to discuss the full range of options available with a professional advisor.
If a married couple is willing to wait to full retirement age and beyond, they have several unique claiming options that could actually add tens of thousands of dollars to their Social Security checks over their retirement.
It is important to understand that the most commonly used strategy for increasing retirement benefits is to delay taking them. While workers can start collecting their Social Security retirement benefits as early as age 62, postponing them to full retirement age (which is 66 if you were born between 1943 and 1954), or better yet postponing benefits to age 70, can make a big difference.
For example, if someone is eligible for a $1,200 monthly benefit at age 62, by waiting until age 66, the monthly benefit increases to $1,600. Waiting until age 70 boosts the benefit a whopping 76% to $2,112. Delaying receipt of the benefit by one spouse will also increase the surviving spouse's survivor benefit. Waiting, however, beyond age 70 will not increase your benefits.
In addition to waiting, Social Security also offers two other little-known strategies for married couples. These apply, however, only to someone who has reached at least full retirement age (currently 66).
Claim and Suspend
The first one is called "claim and suspend" (see ssa.gov/retire2/suspend.htm). Claim and suspend allows a worker at full retirement age to file for Social Security so the worker's spouse can begin collecting a spousal benefit, but ask to receive his or her own benefit later.
This is best suited for one-earner couples where one spouse worked full-time and the other spouse did not work outside the home or did not work long enough to qualify for Social Security retirement benefits.
Here's an example of how it works. Let's say that you are age 66, but want to keep working until 70 to collect a higher benefit. Let's also say your wife is a nonworking spouse who just turned 62 and would like to start receiving spousal benefits on your work record. The problem is she can't get them until you sign up. So you file for your Social Security benefits but request an immediate suspension which allows your wife to claim spousal benefits, without locking you into a lower payment for life. Then when you do decide to start collecting at age 70, you end the suspension and receive a higher benefit for delaying.
This strategy can also be used if you have children under 18, or 19 if they are still attending high school, or are disabled. Each dependent child is eligible for up to 50% of the retiree's full benefit. If any child is younger than 16, your spouse can also qualify for additional benefits as a caregiver, even if she's under age 62.
For two-career couples, the second strategy, known as "claim twice," lets you collect Social Security (at full retirement age) first as a spouse and later using your own work record.
Here's how it works. Let's say that you are 66 and would like to continue working until age 70. However, your wife started collecting her benefits on her own work record at age 64. You could file a "restricted" application with Social Security and collect a spousal benefit which is half of what your wife gets. Then, once you reach 70, you stop receiving the spousal benefit and switch to your own benefit, which will be 32% higher than the benefit you would have collected at your full retirement age.
Married couples can take advantage of a number of strategies to maximize Social Security benefits. Once the first person in a marriage attains age 62, they should explore their options so that they don't miss out on benefits otherwise available to them.
- Heinz J. Brisske
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