It is common for one spouse to retire earlier than the other. One may be burned out, have a health problem or need more time to help care for the grandchildren, while the other continues to work to maintain an income, build a nest egg and save for health insurance.
But that means the couple should think carefully about how to get their Social Security benefits. Your retired spouse may not want to rush to claim Social Security right away, especially if he or she is only 62. This is important information to consider for a newly retired spouse considering Social Security.
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If you retire at age 70, it usually makes sense to claim Social Security sooner, since waiting longer will not lead to higher benefits. However, it becomes more difficult when one of the spouses retires at the age of 62. Not only does accessing Social Security at age 62 result in a much lower benefit, but since one spouse is still working, a higher percentage of that benefit may be eligible for deductions and taxes.
Social Security has a detailed chart that shows how much you’ll lose in monthly benefits if you claim it as soon as you turn 62. Locking in smaller paychecks even if the family still has one source of income can have a negative impact on long-term financial planning, especially if the couple lives into their 90s.
While it may make sense to claim for some people in this situation, claiming Social Security right after retirement shouldn’t be an automatic option. A working spouse’s income and savings may be enough to delay Social Security for many years and secure higher benefits in the process.
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The higher-earning spouse may continue to work, giving the other spouse a chance to retire. However, a retired spouse should not rush to claim Social Security early, especially if they do not have a deep work history.
It is important to consider the benefit of the partner. If you wait to receive Social Security until you are at full retirement age, you can receive up to 50% of your spouse’s full benefit. If you apply early, you won’t get as much: The benefit may be as low as 32.5% if you apply before age 62. The longer you delay until your full retirement age, the greater your spouse’s benefit.
Discuss your finances before taking Social Security
The timing of each spouse’s claim for Social Security is an important financial decision that will affect both of them. That’s why couples should review their finances, check their limited benefits and figure out when they’ll go into Social Security.
You can log into your “My Social Security” account through the Social Security Administration website to check your full retirement age and see your projected benefit. Couples may also want to seek advice from financial planners and tax experts if they need more clarity on the right course of action.
