When you're married, you'll usually coordinate with your spouse about a wide variety of financial decisions. But one of the most important choices you'll need to collaborate on is when to claim Social Security benefits.
Working together to decide when to start receiving retirement checks is crucial, because there are special rules built into the benefits program for married couples. Because of them, one spouse's decision about when to get their first Social Security check can have a profound impact on their partner.
This may seem confusing, but the bottom line is there are three big rules every married couple needs to know. Here's what they are.
1. Your decision to claim benefits early could affect survivor benefits
In most cases, married senior couples have two Social Security checks coming into the household. Each partner gets their own check. But when one person dies, his or her payments cease. This can lead to a big reduction in total household income.
The good news, however, is that the remaining spouse is entitled to survivor benefits. As a result, they get to keep the larger of the two payments either person was receiving. If the lower earning spouse is getting a $1,500 retirement benefit and the higher earner is receiving $1,800, the last surviving spouse would be able to continue receiving the $1,800 after their partner's death.
Unfortunately, if the higher earner has made a decision -- like claiming benefits early -- that shrinks their Social Security check, survivor benefits are also reduced. This could have a devastating impact on the widow(er) left behind. As a result, it's crucial to consider how your partner will fare if you were the spouse who earned more over your career. If you decide to start getting Social Security checks ASAP rather than waiting as long as possible to maximize survivor benefits, this could create serious financial hardship if you pass away first.
2. Your spouse can't claim spousal benefits unless you've started yours
When you're married, you have the choice of claiming either your own retirement benefits (assuming you're eligible for them) or getting spousal benefits.
Spousal benefits are based on your partner's work history, and equal up to 50% of your partner's primary insurance amount (the standard benefit available at full retirement age). There's just one problem: They won't become available until the primary earner whose work record spousal benefits are based on has claimed their own retirement benefits. In other words, if a husband wants to claim spousal benefits based on his wife's earning history, his wife would have to start her retirement benefits first, or vice versa.
Sometimes, it still makes sense for the higher earner to put off a benefits claim, even if that means spousal benefits can't be started. After all, as mentioned above, waiting would increase survivor benefits. But in other circumstances, the higher earner may want to start checks ASAP to make spousal benefits available.
This could make sense, for example, when one spouse didn't work enough to get any retirement benefits at all. In this circumstance, the couple would have no Social Security checks coming in until the higher earner claimed -- but once that happened, two checks could start coming.
3. You can't earn delayed retirement credits on spousal benefits
Finally, if you're claiming spousal benefits, you should know that claiming them prior to your full retirement age can reduce them. But delaying a claim beyond FRA won't increase them.
While your own retirement benefits go up if you wait longer to claim them up until age 70, no delayed retirement credits can be earned on spousal benefits. As a result, monthly Social Security checks don't increase if you wait to claim spousal benefits after FRA.
Understanding all three of these rules can help you coordinate with your partner so you can decide together when each person should claim benefits to get the maximum combined Social Security income throughout your lifetimes.