Social Security Claiming Strategies For Couples

Planning for retirement can be challenging and the confusion on when and how to take your Social Security benefits may add to this challenge. This guide provides you with an overview of some of the complexities of Social Security and explains the options you may have. By understanding the details of Social Security, you can make informed decisions for your future.

File and Suspend:

If you have decided to begin your Social Security benefits, but your spouse has not, there is a strategy that could increase your monthly Social Security payments. You may want to consider using this strategy if you meet the following criteria:

  • The spouse who wants to begin receiving Social Security benefits is either not eligible for a Social Security benefit based on his or her own earnings history, or his or her own benefit is less than half of his or her spouse’s benefit.
  • The spouse who will be filing and suspending his or her benefit has reached full retirement age.

FILE AND SUSPEND EXAMPLE

Matt reached his full retirement age of 66. He is eligible for a $2,000 a month ($24,000 a year) benefit, but wants to delay receiving benefits until age 70 to receive the delayed retirement increase. Jen also has a full retirement age of 66, but at her current age of 62, she decides to begin receiving Social Security. Since Jen has never worked outside the home, she is not able to receive a Social Security benefit based on her own record. By using the file and suspend strategy, Jen can start to receive a Social Security benefit immediately based on Matt’s working history.

Matt files for his Social Security benefit, but then immediately suspends his application. He will not begin to receive any benefits. By doing this, Jen is now eligible to file for her spousal benefit based off of Matt’s earnings history. Since she is under her full retirement age, instead of receiving a full 50% of Matt’s benefit, at age 62 she receives a 35% spousal benefit of $700 per month, or $8,400 per year. (See page 6-7 for an explanation of spousal benefits.)

Since Matt is not receiving his own benefits, from age 66 until age 70 he will be eligible to receive the 8% per year increase in Social Security benefits. (See page 4 for an explanation of delaying Social Security benefits.) By having Matt file and suspend his benefits, he enables Jen to receive Social Security benefits even before Matt begins receiving his benefits.

This is a hypothetical example for illustrative purposes only.

Filing a restricted application:

If your spouse is still working and you have decided to retire, there is a strategy that could allow your spouse to claim a spousal benefit while letting his or her own benefit grow. You may want to consider using this strategy if you meet the following criteria:

  • Both you and your spouse have a Social Security benefit based on your own work histories.
  • The smaller full retirement benefit is greater than 50% of the larger full retirement benefit.
  • At least one spouse has reached full retirement age, and that spouse wants to delay his or her own Social Security benefits to take advantage of the 8% delayed retirement credit.

RESTRICTED APPLICATION EXAMPLE:

Adam has reached his full retirement age of 66. He is eligible for a $2,000 a month ($24,000 a year) benefits, but is not ready to start his Social Security payments. Meghan also has reached her full retirement age of 66 and decides to begin taking her Social Security benefits. Her full retirement benefits are $1,500 per month or $18,000 per year. By using the restricted application strategy, when Meghan starts taking her Social Security benefits, Adam can file for Social Security and request only his spousal benefit.

Meghan files for her Social Security benefits and receives $1,500 per month. Adam then files a restricted application for spousal benefits only – making him eligible for $750 per month. Since Adam is not receiving his own benefits, from age 66 until age 70, he will be eligible to receive the 8% per year delayed retirement credit – increasing his own Social Security benefits. (See page 4 for an explanation of delaying social security benefits.) When he turns age 70, Adam will switch from his spousal benefit and begin collecting off of his own benefit.

This is a hypothetical example for illustrative purposes only.