When deciding how you and your spouse should approach Social
Security retirement benefits, there are a lot of approaches to
consider. Unfortunately, many of them can result in you getting
significantly less than what's available to you.
"It's like a game of chess," says Mari Adam, a certified
financial planner based in Boca Raton, Fla.
Each decision you make as a couple can impact the monthly Social
Security benefits you receive for the rest of your lives.
Consequently, even small missteps can shave thousands from the
cumulative benefits you receive as a couple.
To prevent you and your partner from getting short-changed,
consider these five tips for helping married couples maximize their
Social Security benefits.
Understand the impact of timing
Whether you're single or married, deciding when to start your
benefits is critical. But when a couple makes a bad timing decision
together, the losses are compounded. This makes it especially
important for couples to grasp the basics.
"If you start early, you get less on a monthly basis. If you
wait longer, you get more on a monthly basis," says Kurt
Czarnowski, who worked for Social Security Administration for 34
years and is now principal at Czarnowski Consulting, a retirement
You can choose to start collecting Social Security benefits
early (starting at age 62), but your benefits will be permanently
reduced from what you would have received if you waited until your
full retirement age (age 66 for people born from 1943 to 1954).
Claiming benefits at 62 means your monthly benefit is likely to be
about 25 percent less than what you would have received at your
full retirement age, Czarnowski says.
Conversely, if you wait past your full retirement age to collect
your benefits, your future monthly payout will increase by up to 8
percent each year until you turn 70.
2. Wait at least until full retirement age to claim
Simply waiting until full retirement age to claim benefits can
have a significant impact on a couple's finances over the course of
their lives, says Josh Koehnen, a certified financial planner in
San Diego, Calif.
"Assuming health is good, married couples should hold off until
at least full retirement age (66 or 67) before taking any
benefits," Koehnen says. "Taking it before this time will result in
a permanent reduction that could mean missing out on significant
dollars, depending on how long they live. I recently ran an
analysis for a client, which showed that if they both waited until
full retirement age and ultimately lived until age 85, they would
receive over $150,000 in additional benefits."
For healthy couples who would like to maximize their lifetime
payout, Koehnen recommends delaying the collection of benefits --
with the exception of Social Security spouse's benefits, as you'll
read below -- until age 70 if possible.
3. Delay Social Security benefits for the higher
If one spouse was the major breadwinner for the couple, that
spouse may want to delay receiving monthly retirement benefits from
Social Security longer than their partner. Doing so can help
guarantee that the surviving spouse will collect as large a benefit
as possible when the other dies.
"The spouse with the higher monthly benefit should postpone
collecting Social Security as long as possible, but not beyond the
age of 70," says Michelle Tucker, a certified financial planner at
Tucker Wealth Management in Honolulu, Hawaii. "The object of
postponing is to maximize your benefit and this higher benefit will
be paid to you for life and continue for the life of your surviving
4. Consider a file-and-suspend approach ...
Using a file-and-suspend strategy is one way couples can reap an
oft-overlooked perk: Social Security spouse's benefits.
For example, if both spouses are eligible for benefits and one
opts to file and suspend while the other doesn't file at all, it
allows the nonfiling spouse to claim a spouse's benefit as both of
them continue to let their regular benefits grow. If the couple
intended to delay collecting anyway, this monthly spouse's benefit
effectively equals free money.
"A client recently used this strategy where the husband decided
to file and suspend his benefit at age 66 so that the wife could
take a spousal benefit until they both begin taking their own
benefits at age 70," Koehnen says. "She is now getting about $1,100
per month for the next four years, which will result in over
$55,000 of additional funds."
5. ... or a file-and-restrict strategy
A strategy similar to file-and-suspend is called
file-and-restrict. This approach also bring spouse's benefits into
the mix, but unlike file-and-suspend, one of the spouses must be
collecting his or her regular benefits in this scenario.
"If you are 66 and your spouse is collecting Social Security
based on her earnings history, you can file and restrict your
application and qualify for your spousal benefit based on her
earnings history," Tucker says. "By doing this, you will collect a
spousal benefit while you postpone collecting your own benefit,
which continues to grow."
Then, when your regular benefit has grown to a level that
satisfies you, you can withdraw your restriction and begin
collecting that amplified benefit for the rest of your life.
(Correction: An earlier version of this story indicated that
both partners in a marriage could file and suspend their benefits
to allow one partner to collect spouse's benefits. But SSA
indicates that only one partner should file and suspend to enable
spouse's benefits for the other partner. The nonfiling partner
can file for spouse's benefits once the other partner files and
suspends, allowing both partner's regular retirement benefits to
continue growing until age 70.)