When it comes to Social Security claiming options for couples, there are several strategies to consider that can help maximize your benefits. The best strategy depends on your individual circumstances, including your ages, health, life expectancy, income needs, and other retirement resources. Here are some key options and strategies:
Key Claiming Options
- Early Claiming: You can start claiming Social Security benefits as early as age 62, but doing so will permanently reduce your monthly benefits.
- Full Retirement Age (FRA): This is the age at which you can claim full Social Security benefits without any reduction. For most people, it’s between 66 and 67, depending on your birth year.
- Delayed Retirement Credits: By delaying your benefits beyond your FRA, you can increase your monthly benefit by up to 8% per year until age 70.
Strategies for Couples
- File and Suspend: This strategy allowed one spouse to file for benefits and then suspend them, enabling the other spouse to claim a spousal benefit while the original filer accrued delayed retirement credits. However, this option is no longer available since changes in 2015.
- Claiming Spousal Benefits:
- Spousal Benefits: One spouse can claim a benefit based on the other spouse’s work record, which can be up to 50% of the other spouse’s full retirement age benefit. This can be a good option if one spouse has a significantly lower earning record.
- Restricted Application: If you were born before January 2, 1954, you might still be able to use a restricted application to claim only spousal benefits while letting your own benefits grow until age 70.
- Maximizing Survivor Benefits: The surviving spouse can receive the higher of their own benefit or their deceased spouse’s benefit. This makes it important to consider delaying the higher-earning spouse’s benefits to ensure the surviving spouse receives the maximum possible benefit.
- Staggered Claiming: One spouse claims benefits early while the other delays. This provides some income sooner while increasing the eventual benefits for the spouse who delays.
- Age Difference Considerations: If there’s a significant age difference between spouses, coordinating the timing of when each spouse claims benefits can be particularly beneficial. The younger spouse might delay claiming to boost survivor benefits.
- Health and Life Expectancy: If one spouse has a shorter life expectancy, it may make sense for that spouse to claim earlier, while the healthier spouse delays.
Examples of Strategies
- Higher Earner Delays: The higher-earning spouse delays claiming benefits until age 70 to maximize the delayed retirement credits, which increases both their own benefit and the survivor benefit.
- Lower Earner Claims Early: The lower-earning spouse claims benefits at or soon after age 62, providing an income stream while the higher earner’s benefits continue to grow.
The best strategy depends on the couple’s specific situation. Factors such as financial need, health status, life expectancy, and other retirement resources should all be considered. Consulting with a financial advisor who specializes in retirement planning can help tailor a strategy to your unique needs.
-Nguyễn Bách Khoa-