When approaching retirement, one of the most critical decisions for married couples is how to file for Social Security benefits. The timing of when you and your spouse begin collecting benefits can significantly impact not only your immediate retirement income but also the benefits available to the surviving spouse. With multiple filing options, it’s essential to develop a strategy that aligns with both of your financial goals.

Understanding Social Security for Married Couples

When considering Social Security, it’s important to take into account both spouses’ work histories. The lower-earning spouse may be eligible to receive spousal benefits based on the higher earner’s work record, and there are different ways to maximize your combined benefits. The ultimate goal is to maximize the survivor benefit, ensuring that the surviving spouse receives as much income as possible.

Spousal Strategies: Focusing on Joint Life Expectancy

For couples with similar income levels, one common strategy is to delay claiming Social Security benefits until both spouses reach the age of 70. By doing so, each spouse can increase their future monthly payouts, benefiting from the 8% annual increase in benefits after reaching full retirement age. However, delaying benefits requires careful planning and sufficient assets to cover expenses in the years leading up to Social Security payouts.

In situations where one spouse earns significantly more than the other, the higher-earning spouse may delay claiming until age 70, while the lower-earning spouse may begin collecting earlier. This strategy, known as the “Split Filing Strategy,” allows the couple to lock in a higher combined monthly income while also ensuring a higher benefit for the surviving spouse when one passes away.

Spousal Benefits: Key Considerations

Spouses, including those who have never worked, are eligible to claim Social Security benefits based on either their own earnings or 50% of the higher-earning spouse’s benefit. However, the lower-earning spouse can only claim spousal benefits after the higher-earning spouse files for their own benefits. Additionally, claiming spousal benefits before full retirement age (which ranges from 66 to 67 depending on your birth year) will result in a permanent reduction in the amount received.

If you decide to claim benefits early, you may receive as little as 32.5% of the higher-earning spouse’s full benefit at age 62, and the amount will continue to decrease the earlier you file. Many retirees regret claiming too early, as this decision can lead to leaving substantial benefits on the table.

When to File: Timing Is Crucial

While waiting until age 70 to claim benefits can increase monthly payouts, there are circumstances where filing earlier might make sense. For example, if there are health concerns or urgent financial needs, early filing may be necessary. In such cases, the decision to claim early should be carefully weighed against the long-term loss in benefits.

Rules and Considerations for Different Filing Strategies

It’s important to note that not all filing strategies apply to everyone, and certain rules may vary depending on your individual situation. Before making any decisions, it’s recommended to consult with the Social Security Administration (SSA) to get detailed information tailored to your specific needs.

What About Same-Sex Couples?

For same-sex couples, the SSA recognizes marriages in all states and extends benefits to those in legally recognized unions. It’s crucial for same-sex couples to reach out to the SSA to ensure they are receiving all available benefits, including spousal and survivor benefits.

Taking the Guesswork Out of Your Decision

Given that Social Security benefits can make up a substantial portion of retirement income, it’s important to avoid making decisions based on assumptions. Setting up a “my Social Security” account allows you to access accurate information regarding your estimated benefits and work history. From there, a financial professional can help you explore various filing strategies to ensure that you and your spouse make the most of your benefits.