This Social Security Move Can Help Couples Buy Time Without Guessing the Future
Social Security can act as a valuable source of income in retirement, but when you claim benefits determines how much you receive for the rest of your life.
Deciding when to claim can be more complicated for spouses. On one hand, you can claim as soon as you turn 62, but waiting until 70 results in the maximum benefit. There are other details to consider, such as each spouse’s age and who earned more in their career.
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How the split-claiming strategy works
Waiting until age 70 means you’ll get the maximum Social Security benefit, so it’s often a good move if you’re able to do it. But both spouses don’t have to wait until they turn 70 to claim Social Security, especially if their finances are tight. The lower-earning spouse can claim benefits a little earlier, since there isn’t as much of a payoff with waiting. The higher earner can then wait until 70 and secure a higher benefit for the family.
You should also consider a potential survivor benefit. The size of this benefit is based on the survivor’s current benefit or the deceased spouse’s benefit, depending on which number is higher. That gives the higher-earning spouse more incentive to delay claiming benefits for as long as possible.
A spouse with a history of health issues may want to consider taking out Social Security early. You typically have to get into your early 80s before breaking even on claiming Social Security at 70. People who believe they have a low likelihood of living that long can claim some benefits earlier and have more financial flexibility now instead of later.
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Why it can be especially helpful for surviving spouses
The survivor benefit angle is a main reason higher-earning spouses may want to consider delaying claiming Social Security. It gives the lower earner an extra financial lifeline, but don’t forget to take your ages into consideration. If the higher-earning spouse is 55 and the lower-earning spouse is 64, the higher-earning spouse may be more likely to outlive the lower earner.
People who consider delaying for a higher survivor benefit are accepting lower cash flow now for higher guaranteed income later. By the time a surviving spouse taps into their Social Security benefits, that spouse likely has fewer options to re-enter the workforce. Their Social Security benefits and savings must be enough to keep up with monthly expenses.
When this move may — and may not — make sense
Having one spouse take out Social Security early often makes the most sense for couples with some savings and part-time income. Early Social Security benefits can close the gap while letting the higher-earner wait a little longer before claiming Social Security.
However, this strategy doesn’t work as well for couples who are in good health and are expected to have above-average longevity. It’s also harder for both spouses to wait if they both must take out Social Security to cover current expenses.
You can check your personalized Social Security estimates before claiming benefits on the Social Security Administration's website. This personalized information can help you make a better decision with your claiming window.