Social Security can serve as an important source of income in retirement, but when you claim benefits it determines how much you get for the rest of your life.
Deciding when to file can be very difficult for couples. On the other hand, you can apply as soon as you turn 62, but waiting until 70 results in a greater benefit. There are other details to consider, such as the age of each partner and who has earned more in their career.
How the division claim strategy works
Waiting until you’re 70 means you’ll get more Social Security benefits, so it’s often a good move if you can. But both spouses don’t have to wait until they turn 70 to get Social Security, especially if their finances are solid. A low-income spouse can claim benefits early, as there is not as much pay for waiting. A high earner can wait until 70 and ensure a higher family income.
You also have to consider the potential survival benefit. The size of this benefit is based on the survivor’s current benefit or the deceased spouse’s benefit, whichever is higher. That gives the higher-earning spouse more incentive to delay claiming benefits as long as possible.
A spouse with a history of health problems may want to consider taking Social Security early. You usually have to get into your early 80s before you can even claim Social Security at age 70. People who believe they have a low chance of living a long life can seek certain benefits early and have more financial flexibility now instead of later.
Why it can be especially useful for married couples who are still alive
The survivor benefit angle is the main reason high-earning spouses may want to consider delaying claiming Social Security. It gives low earners an extra financial lifeline, but don’t forget to consider your age. If the higher-earning spouse is 55 and the lower-earning spouse is 64, the higher-earning spouse may be more likely to survive than the lower-earning spouse.
People who consider delaying for higher returns accept lower cash flow now for guaranteed income later. When a surviving spouse accesses his or her Social Security benefits, that spouse likely has several options for re-entering the workforce. Their Social Security benefits and savings should be enough to cover monthly expenses.
Where this move may – and may not – make sense
Having one spouse take Social Security early often makes the most sense for couples with some savings and temporary income. Early Social Security benefits can close the gap while allowing high earners to wait a little longer before claiming Social Security.
However, this strategy does not work well for couples who are in good health and are expected to have above average longevity. It is also difficult for both spouses to wait if both have to withdraw from Social Security to cover current expenses.
You can check your personal Social Security estimates before claiming benefits on the Social Security Administration website. This personal information can help you make a better decision about your search window.
