Strategies to Maximize Social Security Benefits for Married Couples

Strategies to Maximize Social Security Benefits for Married Couples

Social security benefits make up a large part of retirement planning, especially for married couples. With a little planning and help from your financial advisor, you and your spouse can maximize your social security benefits.

Strategies to maximize social security for married couples may include delaying social security income until age 70, capitalizing on one spouse’s benefits, or strategically splitting both partners’ benefits to provide a steady income source.

Social Security Benefits Estimate

Before making any plans to maximize your social security benefits, your first step should be to visit the Social Security Administration (SSA) website and get an estimate of your benefits.  

After you log in to your Social Security Benefits account, you can see what your estimated Social Security benefits are at full retirement age. You can also compare your monthly social security benefits if you start receiving social security at age 62 (early), 66 to 67 (full, age may vary), or age 70 (delayed retirement). If you delay when your benefits start, you typically will receive a higher monthly income, but this may not be the best strategy for everyone. Consider your overall health and expected longevity when considering whether to take an early or late retirement.

In addition to checking your own social security estimated payment, it is important to compare the estimates for you and your spouse. Married couples can claim spousal benefits based on their spouse’s work record. This benefit can be up to 50% of the spouse’s benefit at full retirement age.

Strategies to maximize social security benefits

Depending on your and your spouse’s health, retirement goals, current income, and retirement savings, consider the following options for receiving Social Security benefits:

Both claim social security at age 62

If you have paid Social Security taxes for at least 10 years, you are entitled to receive your Social Security benefits as early as age 62. A married spouse who is not entitled to receive social security (has not met the contribution requirements) or who has a lower benefits amount can also collect on their spouse’s earnings starting at age 62. Spousal benefits range from one-third to one-half of the higher earner’s full retirement benefits, depending on age.

To qualify for spousal benefits, the lower-earning spouse must be at least 62 years old, and the higher-earning spouse must have already applied for their social security benefits. If the higher-earning spouse dies first, then the spousal benefits end, but the surviving spouse’s benefits increase up to the amount the deceased, higher-earning spouse was entitled to receive.

Collecting at the earliest possible time can make sense for people who have health issues or who are unable or unwilling to work longer and need their social security benefits.

If you collect starting at age 62, you can expect to receive lower monthly benefits than if you waited until the age of full retirement. If you start collecting and change your mind within 12 months, you can reset your benefits by repaying all the benefits you and your family have received. Another option is to suspend your benefits when you reach full retirement age and begin collecting them again later.

Both claim at full retirement age

Another option is for both partners to claim their benefits at full retirement age. Since it is unlikely that both partners will reach full retirement age at the same time, this typically means a staggered approach to collecting social security benefits.

If one spouse is entitled to higher benefit amounts than the other, consider delaying when the higher earner begins receiving them. The higher earner’s benefits will increase by a higher amount than the lower earner’s.

If you and your spouse can manage your finances on the lower earner’s benefits alone and delay receiving the higher earner’s benefits, the higher earners benefits will increase due to the delay, as will the surviving spouse’s benefits (up to 50% of the higher earner’s benefits at full retirement age).

Bridging the Social Security gap

The age at which you retire and the age at which you are eligible for or want to start your Social Security benefits can be very different.

If you want to delay receiving your Social Security benefits to maximize your monthly benefit, consider working part-time or using other income, such as your 401K, to replace your Social Security benefits.

Social security benefits are only one part of retirement planning. A financial advisor can help you maximize your savings and social security benefits to attain the maximum value from these investments.

There is no one-size-fits-all guide to investment. Working with a wealth manager can ensure you make the best financial decisions for yourself and your loved ones.

Frame Wealth Management, Gabriel Katzner

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