There are certain benefits to retiring as a married couple, as opposed to being single during your senior years. For one thing, it’s nice to be able to share expenses at a time when money may be tighter.
Also, a lot of retirees find themselves lonely in the absence of going into work every day. Living with a spouse means having built-in company — someone to talk to, spend time with, and run errands with, rather than go it alone.
Image source: Getty Images.
It can also be advantageous to be married in retirement from a Social Security perspective — especially in a situation where two spouses are entitled to benefits based on their respective earnings records. If that’s the boat you’re in, you have a prime opportunity to claim Social Security strategically. Here are a few options you can consider.
1. Have the lower earner file on time and the higher earner delay
It’s important to be honest about the state of your savings when deciding when to claim Social Security. If you and your spouse don’t have a lot of money socked away, it may not be the best idea for either of you to file for Social Security early. And if you’re both in good health and expect to live fairly long lives, that’s another reason not to sign up too soon.
What you could do, though, is have the lower earner file for Social Security on time so you get some income coming into your household while having the higher-earning spouse delay their claim. For each year you hold off on Social Security past full retirement age, your monthly benefits increase by 8%. And the reason it pays to have the higher earner delay is that the 8% boost will be worth more when applied to a larger benefit.
2. Have the lower earner file early while the higher earner delays
Age 62 is the earliest age to claim Social Security. And it will result in a pretty notable reduction in your monthly benefits.
As a couple, you may decide to have the lower-earning spouse claim Social Security early (meaning before full retirement age) so you have money coming in that you can enjoy while you’re younger. At the same time, you could have the higher earner delay their claim to even things out. Having one spouse file early could also make sense if one of you is forced to stop working sooner than planned and you need the income to make up for a missing paycheck.
3. Have both spouses file on time
Delaying Social Security until age 70 takes a lot of patience, and it could have an impact on your lifestyle. You may be very limited in what you can spend until you have two sets of Social Security benefits rolling in.
For this reason, you may decide that as a middle-ground solution, you won’t have anyone claim benefits early, but you also won’t have either of you file late. What you lose in the form of boosted benefits, you gain in the form of getting the money a bit sooner.
This is a decision to discuss thoroughly
Deciding when to claim Social Security is not easy, whether you’re living solo in retirement or you’re married. It’s important to run through your options as a couple and see what makes the most sense.
In the course of doing so, some questions worth asking include:
- What do our savings look like?
- What’s our work status?
- What large near-term expenses do we have on the horizon?
- How’s our health?
- What are our goals for retirement?
And if you’re still stumped, you may want to sit down with a financial advisor as a couple and get their input. This could also be a wise thing to do if you’re at odds over the decision and need someone unbiased to help you come up with a strategy you can both get on board with.
