Social Security claiming strategies for married couples

Married couples have the most flexibility when it comes to collecting Social Security benefits. The best claiming strategies depend on the relative ages and individual earning histories of the spouses. 

Read more about Social Security strategies for married couples in this guide.

In most cases, it makes sense for the higher-earning spouse to delay claiming Social Security for as long as possible — up to age 70 — to lock in not just the maximum retirement benefits for the couple during their lifetime, but the largest possible survivor benefit for the remaining spouse as well. That assumes both spouses are relatively healthy, can afford to delay collecting benefits and are close in age.

This year marks the beginning of a new era of Social Security planning as the result of the disappearance of a critical claiming strategy for people who reach full retirement age in 2020 or later. But the ability to file a “restricted claim for spousal benefits” still exists for people who were born on or before Jan. 1, 1954.

For example, one reader recently wrote to me noting that his wife is 69, retired and has been collecting Social Security benefits since she was 62 years old. He is 66, still working and has not yet claimed Social Security. He asked what they could do to maximize their Social Security benefits. He plans to wait until age 70 to claim his benefits.

“The amount I would receive in Social Security benefits is significantly more than double the amount she currently receives,” he wrote. “Is there a way for her to be able to get half of my Social Security now?”

No, the wife won’t be able to collect on her husband’s earnings record until he claims his Social Security. But, in the meantime, because he was born before the Jan. 1, 1954, cutoff date, he could collect half of her full retirement age benefit amount while his own Social Security retirement benefit continues to grow by 8% per year up to age 70.

Once he does claim his benefit, his wife might step up to a larger amount, but it would be worth less than half of his full retirement age amount because she claimed her own Social Security benefit early. The key is to determine the “excess spousal amount” by subtracting the wife’s smaller FRA benefit from half of her husband’s larger FRA amount.

Let’s assume the husband’s benefit at his FRA is $2,800 per month and the wife’s FRA is $1,000 per month. The excess spousal amount is $400, which is the difference between her FRA amount ($1,000) and half of his FRA amount ($1,400). The maximum spousal amount is worth half of the worker’s FRA amount, not half of a larger amount that may include delayed retirement credits.

But because she claimed Social Security at age 62, her retirement benefit is permanently reduced by 25% to $750 per month. Once her husband claims his Social Security, the excess spousal amount of $400 would be added to her permanently reduced benefit of $750 for a total new benefit of $1,150. Her benefit will never be worth half of his FRA amount — $1,400 per month — because she claimed her retirement benefit early.

If the husband waits until 70 to claim Social Security, he would receive about $3,696 per month — a 32% increase from his FRA benefit amount of $2,800 because he earned delayed retirement credits of 8% per year for every year he postponed claiming benefits beyond his FRA up to age 70.

If he dies first, his widow would be entitled to a survivor benefit worth 100% of what he was receiving at time of death and her smaller retirement benefits would disappear. Even though her retirement benefits were permanently reduced because she claimed her own Social Security early, it would not affect her survivor benefits if she was at least full retirement age when she became widowed.

In the meantime, this reader, who was born on or before Jan. 1, 1954, could still file a “restricted claim for spousal benefits” and collect half of his wife’s full retirement age benefit amount — not half of her reduced benefits — while his own retirement benefits continue to grow by 8% per year up to age 70. People who were born after that date can’t use this strategy.

Another adviser wrote to me asking for claiming strategy guidance for a married couple, both age 62 with a full retirement age of 66 and 8 months. The husband is still working. The wife is not.

[Read more: Social Security benefits for a nonworking spouse]

Because they were both born after the Jan. 1, 1954, cutoff date, neither spouse has access to creative claiming option. They will each be paid the highest amount to which they are entitled at their age of claim, whether on their own earnings record or as a spouse. They don’t get to choose which benefit they want to receive.

[More: Both spouses don’t always need to delay Social Security until 70]