When to claim social security is a big decision. But if you are married, there is another factor to consider.
Choosing to receive your benefits can affect the survivor benefits your spouse can receive if they outlive you, and vice versa. Here’s what you should consider.
Why is it important to consider your spouse’s plan?
If you start receiving benefits as soon as you are eligible (age 62) you are locked into lower benefits than if you wait until your full retirement age or age 70, when benefits are maximized. Generally, the survivor benefit is based on the amount of the deceased employee’s benefit, and the surviving spouse can choose to receive that or his or her own. A surviving spouse may be able to receive the deceased spouse’s full benefit upon reaching full retirement age.
Remember that they only get one benefit; you cannot collect your own and survivor benefits.
Why survivor benefits change the equation
If the higher-earning spouse passes first, the lower-earning spouse can choose to receive the deceased’s benefit for life. Adjusted for the cost of living each year.
Because of this, it often makes sense for the higher-earning spouse to wait until 70 — or as long as possible until that age — to access benefits. The lower-earning spouse may choose to access Social Security early so that the couple can live off that extra income and savings until the higher-earning spouse is able to receive benefits at age 70. (A survivor’s benefit is different than a regular spousal benefit that applies when both spouses are alive.)
This arrangement can be very important if there is a large gap in income between spouses. For example, if one spouse earns more and the other stays home with the children and does not work, it would be beneficial to both if the higher-earning spouse waits to receive Social Security until age 70.
How couples should think about the decision
Although you will secure the highest income if you wait until 70, it is not the right decision for everyone. Not having enough savings or health problems, for example, can mean that for some people, it makes more sense to apply before age 70.
The age gap between spouses also plays a role. If the earner is 10 years older than the low earner, then it may make sense for the higher salary to wait until age 70. The breadwinner may die more than a decade before the surviving spouse, making it even more important to receive a higher Social Security benefit.
You can open an account with the Social Security Administration through its website to compare your estimated benefit based on claim age. Talking to a financial planner before applying can help you make an informed decision.
