Social Security is a complex system, and there is a lot of strategy involved in making sure you get the most out of your retirement benefits. For example, you have an eight-year window to start collecting the federal payments, plus the option to suspend collection of benefits. For couples, there are even more things to consider, such as spousal benefits and survivors benefits.
We asked three of our Social Security experts to each explain one potential Social Security advantage that applies to couples, and here is what they said.
Dan Caplinger: One Social Security strategy for couples that often gets lost in the shuffle involves taking advantage of your right to claim spousal benefits while leaving your own retirement benefits to grow. Known as the "file as a spouse first," or FAASF, strategy, this method only works for spouses who have reached full retirement age, which is currently 66. That is because if you haven't reached full retirement age, you're not allowed both to file for spousal benefits and to defer your own -- you're deemed to apply for both at the same time.
The FAASF strategy allows you to earn delayed retirement credits on your retirement benefit while still collecting some cash earlier in your retired years. In order to qualify, your spouse has to file for regular retirement benefits, but the better-known file and suspend strategy might also be available if the spouse has reached full retirement age. The net effect is to collect sizable Social Security benefits at age 66 while allowing your own, presumably larger payout to rise by 8% per year until you reach age 70. In a nutshell, FAASF can let Social Security recipients have their cake and eat it too.
Dan Dzombak: Another potentially game-changing Social Security advantage for couples is survivors benefits.
Survivors benefits allow people to claim Social Security benefits based on their deceased spouse's work record. You can also claim benefits on a deceased ex-spouse's work record as long as you were married for at least 10 years. Your right to claim survivors benefits on an ex-spouse is not affected if that person remarried, but is void if you marry again before age 60.
One thing that confuses many people regarding survivors benefits is that this does not mean you get two checks from Social Security. It just means you have another option if the survivors benefits are greater than what you would otherwise receive based on your work record.
The amount you receive is based on your spouse's Social Security benefits and the age at which you claim. Widows can claim as early as age 60, though the benefit is up to 28% lower than the full benefit based on the exact age of claiming. Widows are eligible to claim 100% of their deceased spouse's Social Security benefits if they wait to claim until their full retirement age, which is 66 for those born between 1945 and 1956 and 67 for those born in 1962 or later.
Selena Maranjian: One strategy for married couples in which just one spouse is a high earner, and in which the non-high earner is at least 62 and will receive more in spousal benefits than his or her own benefits, is the "file-and-suspend" move. With this strategy, the high earner files to begin collecting benefits at full retirement age, but then immediately suspends the payments. The reason for filing and then suspending is that the lower earner isn't permitted to receive spousal benefits until the high earner has filed for his or her own benefits.
Once the high earner suspends payments, it will be as if he or she has delayed receiving them, and they will increase accordingly -- by about 8% per year, until age 70. This way, the high earner will ultimately end up with greater benefits, as will the spouse, who is delaying receiving benefits that also will increase until he or she reaches age 70. In the meantime, the spouse -- and the household -- is receiving some Social Security income through spousal benefits.
This strategy is fully legal, though some worry it could become unavailable in the future due to concerns about abuse. It was, after all, born in an earlier era, when many couples featured one partner who didn't work at all, or in which the female spouse earned significantly less. Still, the strategy remains available for now and can benefit some couples.