5 Social Security tips for couples

By Lucy Lazarony

For the Deseret News

Published: Thursday, Aug. 29 2013 12:05 p.m. MDT

In this Friday, Jan. 11, 2013 file photo, the Social Security Administration's main campus is seen in Woodlawn, Md. U.S.

Patrick Semansky, Associated Press

Enlarge photo»

Editor's note: This article first ran MoneyRates.com. It has been reprinted here with permission.

When deciding how you and your spouse should approach Social Security retirement benefits, there are a lot of approaches to consider. Unfortunately, many of them can result in you getting significantly less than what's available to you.

"It's like a game of chess," says Mari Adam, a certified financial planner based in Boca Raton, Fla.

Each decision you make as a couple can impact the monthly Social Security benefits you receive for the rest of your lives. Consequently, even small missteps can shave thousands from the cumulative benefits you receive as a couple.

To prevent you and your partner from getting short-changed, consider these five tips for helping married couples maximize their Social Security benefits.

1. Understand the impact of timing

Whether you're single or married, deciding when to start your benefits is critical. But when a couple makes a bad timing decision together, the losses are compounded. This makes it especially important for couples to grasp the basics.

"If you start early, you get less on a monthly basis. If you wait longer, you get more on a monthly basis," says Kurt Czarnowski, who worked for Social Security Administration for 34 years and is now principal at Czarnowski Consulting, a retirement planning company.

You can choose to start collecting Social Security benefits early (starting at age 62), but your benefits will be permanently reduced from what you would have received if you waited until your full retirement age (age 66 for people born from 1943 to 1954). Claiming benefits at 62 means your monthly benefit is likely to be about 25 percent less than what you would have received at your full retirement age, Czarnowski says.

Conversely, if you wait past your full retirement age to collect your benefits, your future monthly payout will increase by up to 8 percent each year until you turn 70.

2. Wait at least until full retirement age to claim benefits

Simply waiting until full retirement age to claim benefits can have a significant impact on a couple's finances over the course of their lives, says Josh Koehnen, a certified financial planner in San Diego, Calif.

"Assuming health is good, married couples should hold off until at least full retirement age (66 or 67) before taking any benefits," Koehnen says. "Taking it before this time will result in a permanent reduction that could mean missing out on significant dollars, depending on how long they live. I recently ran an analysis for a client, which showed that if they both waited until full retirement age and ultimately lived until age 85, they would receive over $150,000 in additional benefits."

For healthy couples who would like to maximize their lifetime payout, Koehnen recommends delaying the collection of benefits — with the exception of Social Security spouse's benefits, as you'll read below — until age 70 if possible.

3. Delay Social Security benefits for the higher earner

If one spouse was the major breadwinner for the couple, that spouse may want to delay receiving monthly retirement benefits from Social Security longer than their partner. Doing so can help guarantee that the surviving spouse will collect as large a benefit as possible when the other dies.

"The spouse with the higher monthly benefit should postpone collecting Social Security as long as possible, but not beyond the age of 70," says Michelle Tucker, a certified financial planner at Tucker Wealth Management in Honolulu, Hawaii. "The object of postponing is to maximize your benefit and this higher benefit will be paid to you for life and continue for the life of your surviving spouse."

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