Being married has its pros and cons. On the plus side, you get someone to share a life with, enjoy good times with, and look to for support. On the negative side, you can't just live life on your own terms when there's a spouse in the mix. You have to cater to their needs and make compromises in order to live harmoniously.
Financially speaking, being married could work to your advantage, too -- especially once you enter retirement. If you and your spouse both work, and both contribute steadily to a retirement savings plan, you'll have two nest eggs to share and tap during your senior years. You'll also have two sets of Social Security benefits to claim.
Now, when it comes to signing up for Social Security, you can choose from different filing ages. But no matter which age you land on, it's extremely important to make sure your spouse is on the same page as you before you make your filing official.
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It pays to talk things through
You might assume that if you and your spouse are each eligible for a monthly benefit from Social Security, then you should each feel entitled to sign up at an age that works for you without having to consult the other. But what you may not realize is that your filing choices could end up impacting your spouse, even if they're in line for a benefit of their own.
It may be that you and your spouse both worked, but that you earned a lot more money during your career. Social Security benefits are based on lifetime earnings. So it may be that you're looking at a monthly Social Security benefit of $2,800 while your spouse is eligible for only $1,200.
In that situation, your partner can actually bump their benefit up to $1,400 by filing for a spousal benefit, which is half of what you're eligible for. But your partner can't collect that spousal benefit until you file your own claim. So that's the sort of thing you'd want to talk about.
Similarly, if you pass away before your spouse does, your partner will be eligible for survivor benefits. Those will equal 100% of your monthly benefit.
Now you may be eager to get your money from Social Security on the early side. But claiming benefits before reaching full retirement age will mean accepting a reduced monthly payday for life.
That may not bother you so much. But it could leave your spouse with a lower monthly income stream for life upon your passing.
That's why the decision to sign up for Social Security benefits really needs to be a joint one if you're married -- whether your spouse is entitled to benefits based on their own work record or not. When you've built a life with someone, it's important to take their needs into account. And since your filing age could impact your spouse's finances tremendously, you should make a point to sit down and have a conversation about taking benefits.
