Best Social Security Strategies for Married Couples
Spouses can boost their benefits by coordinating the timing of their claims.
Married beneficiaries can claim benefits based on their own earnings record or choose to receive up to 50% of the amount for which their spouse is eligible at full retirement age. If the spouse claiming a spousal benefit hasn't reached full retirement age, that benefit will be less than 50%. This benefit provides an important safety net for mothers (or fathers) who stayed out of the workforce for long periods to care for their children. However, even dual-career couples can take advantage of spousal benefits to increase their lifetime payments.
File and suspend. Suppose you're the higher earner and want to maximize benefits by waiting until age 70 to begin receiving them. Also suppose your spouse will receive higher payments with a spousal benefit rather than with benefits based on her own earnings record. However, she can't collect spousal benefits until you file for your own.
Here's how to get around this conundrum: Once you reach full retirement age, file for your own benefit and then ask Social Security to suspend it. You'll continue to earn delayed-retirement credits until you elect to start receiving benefits. Meanwhile, your spouse can receive spousal benefits as long as she's at least 62. If she's younger than full retirement age, her spousal benefit will be less than 50% of yours.
Restricting an application. Say you're the higher-earning spouse and you have hit full retirement age, but you'd prefer to delay taking Social Security until you reach age 70 to maximize your own benefit and survivor benefits. While you're waiting, you can bring in extra by applying for a spousal benefit for yourself.
To execute this strategy, the lower-earning spouse claims her own benefit first, then the higher earner files for benefits based on the lower-earning spouse's earnings. The higher earner collects spousal benefits while his own benefit continues to grow. The higher earner gets 50% of the spouse's full-retirement-age benefit even if she's not yet 66. The higher earner can switch to his own benefit at age 70 (or earlier). His spouse can then switch to a spousal benefit based on what he was entitled to receive at full retirement age.
To use this strategy, the higher earner must be at least full retirement age. Otherwise, Social Security will automatically give that spouse the highest benefit he's entitled to receive, which will probably be based on his earnings. Consider using this strategy if one spouse's benefit at full retirement age is higher, but not so much higher that the lower-earning spouse would be better off with spousal benefits.
A combo strategy. What about couples with similar lifetime earnings? If you both expect to live a long time, you could get the most out of both of your benefits by waiting until age 70 to apply. But unless both of you plan to work until age 70, that strategy could force you to take larger withdrawals from your savings than you're comfortable with. Here's an alternative that combines both the "file and suspend" and "restrict an application" strategies.
When one spouse -- let's say the wife -- reaches full retirement age, she files for benefits and asks to have them suspended. The husband then files a restricted application for spousal benefits. Doing so enables him to receive spousal benefits from 66 to 70, providing a stream of income until both reach age 70. At 70, the husband switches to his own benefit and the wife ends suspension of hers. Because both spouses waited until age 70 to claim their benefits, they will have accrued the maximum in delayed-retirement credits.