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Contrary to what some might say, if you are married, you and your spouse do not need to file for Social Security benefits at the same time. In fact, in many cases, that's the exact opposite of what you should do. Carefully planning out when you and your spouse will apply for Social Security is an enormously important task.

There are four variables that help explain why:

  1. Starting at age 62, and continuing until 70, every year that you wait to claim benefits, the amount of your monthly benefit increases by 8%.
  2. Once one partner passes away, the surviving partner has the ability to assume the deceased' monthly benefit if it is the larger of the two.
  3. Husbands have typically earned more than wives during their earnings years (though this is certainly not always the case).
  4. Wives tend to live longer than husbands (but that's not a hard-and-fast rule).

Putting these four variables together

The approach to applying for Social Security that I advocate involves being able to tap into some of the benefits at age 62, while allowing others to grow as much as possible.

Let's consider a hypothetical couple, Mark and Mary. They are both 60 years old, have some money in retirement accounts, and count on a modest pension to help make ends meet in retirement.

Over his lifetime, Mark earned an inflation-adjusted average of $70,000 per year. If he claimed at age 66 -- the current full retirement age -- Mark would get $27,000 per year from Social Security.

Mary also worked throughout her adult life, though she took time off after having kids. Because of this, her lifetime earnings were lower -- averaging $35,000 per year. If she claimed at age 66, Mary would get just under $17,900 per year.

Here's how much each would receive annually, based on when they claim, rounded to the nearest hundred.

Let's first tackle when Mark should apply for Social Security

When one of these two passes away, Social Security benefits will fall no matter what, though only one benefit can be received. Because Mark had higher lifetime earnings, I would argue that it makes most sense for Mark to delay earnings as long as possible. Not only will that enable the couple to have more money to spend beyond age 70, but if Mark passes away before Mary, she will be able to assume his benefit of $35,600 per year.

So when should Mary file for Social Security?

If neither Mark nor Mary enjoys their career any more, I would suggest that they retire as soon as financially possible. This means that they will have to add together whatever they'll get from their savings -- using the 4% rule -- and what their pensions will pay, and compare that against their predicted annual spending in retirement.

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As soon as Mary's Social Security benefit would bridge this gap, she should file for benefits.

Let's assume that predicted spending in retirement is $50,000, that the couple has a nest egg of $250,000, and that they'll get $25,000 per year from pensions. The equation would look like this:

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By looking at the chart above, we see that Mary would be able to collect the requisite $15,000 from Social Security starting at age 64. She could start collecting then, they could both retire, and at age 70, Mark could file for his benefits.

But we could even take it a step further and assume that they'll be able to withdraw much more than 4% of savings per year. Since Mark will have such a big benefit at age 70, the nest egg will only need to provide at its current level for less than 10 years. Presumably, Mary could file as early as 62 and the couple would be just fine, financially speaking.

Obviously, not every couple will match this description. In fact, there are as many scenarios out there as retired couples. But the takeaway message remains the same: The lower-earning spouse should file as early as possible, while the higher earner should file as late as possible. Using this as a starting point should set you up well to evaluate your options.

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