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This Social Security Strategy Is Great for Couples

By Maurie Backman - Jul 20, 2021 at 7:02AM

Key Points

  • Couples have many options when filing for Social Security.
  • Spreading claims out could be a smart move for retirees.

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Staggering your benefit claims could be a great way to get the best of both worlds.

The great thing about going into retirement as a married couple is being able to support one another logistically, emotionally, and financially during that transition. In fact, if you're part of a couple where you and your spouse both worked, then you may be in a solid position to maximize your retirement income. This especially holds true if you both socked away money in a retirement savings account.

But withdrawals from savings won't be your only income source during retirement. If you and your spouse both worked, you may each be entitled to a Social Security benefit of your own. And in that case, teaming up to file strategically could put you in a great position to retire when you want to, all the while getting more money out of the program.

It pays to stagger

The age at which you choose to claim Social Security is significant. If you wait until full retirement age, or FRA, to sign up, you'll get the exact monthly benefit you're entitled to based on your wage history (specifically, what you earned during your 35 most profitable years on the job).

Two seniors looking at laptop.

Image source: Getty Images.

Meanwhile, you can claim Social Security as early as age 62, but if you file ahead of FRA, your benefits will be reduced. Similarly, you can delay your filing beyond FRA and grow your benefits in the process. For each year you hold off, your benefits will increase by 8% until you reach the age of 70.

Clearly, claiming benefits early has the drawback of a reduced income stream. Waiting to file, however, has the drawback of, well, having to wait. But if you're married and you and your spouse are both entitled to benefits, you can really have the best of both worlds by spreading your filings out.

Here's how that might work. You may decide that whoever's in line for a lower monthly benefit will sign up for Social Security at age 62. That way, you and your spouse get some money coming in sooner. That money may allow you to retire early, partially retire, or continue working but travel more while you're still relatively young.

Then, you may decide to have the higher earner hold off on claiming benefits until FRA or even beyond. That way, that higher benefit can grow into a larger sum so that you get more money throughout retirement.

Of course, it's also possible to do the opposite. You could have the higher earner file for benefits early and the lower earner file later on. The point, either way, is that staggering your two claims could make a lot of sense. That way, you won't have to wait too long to get access to your money, but you also won't slash two sets of benefits and get stuck with lower payments for what could be multiple decades.

It's all about coordinating

When you're married, getting ready for retirement isn't something you should do by yourself. It's important to map out your plans and goals jointly with your spouse so you can get on the same page and come up with tactics that lead to the best financial outcomes. Though you don't have to stagger your Social Security filings when you and your spouse each get a benefit, doing so could really work to your advantage.

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