One nice aspect of being married in retirement is having a partner to share that journey with. The transition into retirement isn't always smooth, so it's helpful to have a spouse there for both moral and financial support.
And speaking of finances, married couples often have an advantage over single retirees in that they're able to bring two sets of savings into the mix. They also, in some cases, are eligible for two sets of Social Security benefits.
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It's important to strategize with your spouse on Social Security so you can make the most of that crucial income stream. With that in mind, here are a few critical Social Security mistakes married couples might make if they aren't careful.
1. Claiming benefits too early
It may be that both you and your spouse worked and are therefore each entitled to a monthly benefit from Social Security. You might think that because you have two sets of benefits coming your way, you can afford to reduce them by signing up early. But that's a move you might sorely regret.
If you and your spouse were born in 1960 or later, your full retirement age for Social Security is 67. You can claim benefits as early as 62, but those monthly payments will be subject to a reduction for each month you claim them before age 67.
It may be that you and your spouse would like to retire early, or at least reduce your working hours, and that you need Social Security to make that happen. But if that's the case, at the very least, see if you can manage with only one of your claiming benefits early so the other person's benefits don't take a hit. You may find that you need the income down the line to cover your retirement costs without stress.
2. Not understanding how spousal benefits work
Even if both you and your spouse worked, the lower earner of the two of you may be entitled to spousal benefits. Spousal benefits are worth up to 50% of an eligible recipient's benefit at their full retirement age. And you should know that Social Security will pay you the greater of your own benefit or a spousal benefit.
Let's say you're entitled to $1,400 a month from Social Security but your spouse, who was a much higher earner, is eligible for $3,200 a month. In that case, despite being eligible for your own benefit, you'd be able to collect up to $1,600 a month in spousal benefits.
But it's important to understand the rules of spousal benefits. For one thing, if you're married and want spousal benefits, you can't get them until your spouse signs up for Social Security themself (the rules are different if you're divorced). Also, you can't grow a spousal benefit by delaying your Social Security claim past full retirement age.
When you're talking about a benefit that's based on your own earnings record, each year you delay your filing past full retirement age gives your Social Security checks an 8% boost, up until age 70. But the maximum spousal benefit you can collect is 50% of your spouse's monthly check at their full retirement age.
3. Forgetting about survivor benefits
You may not love the idea of having either you or your spouse delay Social Security past full retirement age, despite the higher benefit it can result in. And you may do some budgeting and discover that you can cover your expenses without having to boost your Social Security checks.
But having the higher earner delay Social Security until age 70 could be advantageous if there's a large age gap between you, and if the lower earner is likely to outlive the higher earner by many years. If your spouse is the higher earner and they delay Social Security until 70 for larger checks, it could set you up to collect more generous survivor benefits upon their passing.
Work together to manage your Social Security benefits
There's a good chance Social Security will play a big role in your retirement income picture. For this reason, it's important that you and your spouse talk through different strategies together and sync up on a plan.
It could also pay to sit down with a financial advisor and see what they recommend as far as Social Security goes. They can look at your total income picture and needs to help you come up with a plan to maximize your benefits as a married couple.
