Married and Retiring? Here's How to Claim Thousands More in Social Security Benefits

When you make your retirementplan, you need to give careful thought to your Social Security claimingstrategy. This is especially true if you are a married couple. The decisions youmake about when each spouse should claim benefits can have a hugeimpact on your household income.

Unfortunately, many spouses make independent claiming choices without realizingthis can be a costly mistake and a major missed opportunity. Couples that worktogether, on the other hand, can find a strategy that makes sense for bothspouses and often end up with thousands of dollars more in benefits inthe process.

It just takes a little knowledge and some coordination. Here’s how you can doit.

Find Out: I can’t believe this $24,108 Social Security secret was so simple

Why married couples have more Social Security claiming options

Married couples have more Social Security claiming options because each spousecan claim benefits on their own work record or their spouse’s. For example, youcould claim:

• Retirement benefits, with the amount based on an inflation-adjusted averageof monthly wages during your highest 35 earning years.

• Spousal benefits equal to up to 50% of your spouse’s primary insuranceamount (standard benefit).

• Survivor benefits, equal to the amount your spouse was collecting or theamount they’d have been entitled to at full retirement age, plus any delayedretirement credits they earned.

You have to understand the way these benefit programs work and how much each canprovide so you can maximize combined benefits.

Shopping for cheaper auto insurance? Enter your zip code here to get started.

Why coordination matters so much to maximize lifetime Social Security

Spouses have to coordinate on their benefits because the decisions made by onespouse impact the other. Specifically, your spouse can’t claim spousal benefitson your work history until you claim retirement benefits. Additionally, if youmake an early benefits claim as the higher earner, you shrink your spouse’ssurvivor benefits. You also can’t just file for spousal or retirement benefits; if you file for one kind of benefit, you’re deemed to be filing for all thebenefits you are entitled to (with the exception of survivor benefits).

This means your choice could affect whether your spouse gets to start their ownbenefits, as well as the benefits they’ll have to live off if you pass away.

A common and effective Social Security claiming strategy for marriedretirees

Given the details about how Social Security works, one of the best strategiesrecommended to many married couples involves:

• The lower-earning spouse claims their own retirement benefitsearly (usually around age 62 to 64) to bring some income into thehousehold. They take a hit on their benefits, shrinking the amount they collectcompared to their standard benefit.

• The higher earner delays until 70. This enables them to maxout the larger of the two benefit checks each couple was entitled to. Plus, itincreases survivor benefits.

• The lower earner switches over to spousal benefits. Thehigher earner’s benefits claim unlocks spousal benefits (which were previouslyinaccessible due to rules requiring the person whose records the benefits arebased on to claim first).

This locks in the maximum larger benefit, as well as survivor benefits, andoften not much was lost if the lower earner ends up switching to spousalbenefits once their spouse finally claims.

Save Money: Things to cut when living on retirement (many people ignore #11)

How much can you increase your benefit?

Waiting to claim benefits increases your payment for each month you wait betweenfull retirement age and 70. If the higher earner has an FRA of 67 and waitsthree extra years, that amounts to a 24% increase.

If the higher earner had been on track for a $2,000 standard benefit at FRA, the24% boost means they collect $2,480. And, of course, their spouse will get thisbigger benefit too if the higher earner passes away, as Survivor benefits equal100% of the deceased person’s benefit, including the delayed retirement creditsearned.

As a bonus, the other spouse will have been able to collect Social Security forseveral years before finally claiming their spousal benefits. At 50% of thehigher earner’s $2,000 standard benefit, that means the other spouse would begetting $1,000 in benefits per month after making the switch.

Some married couples can end up with $10,362 per month

For some couples, coordinating requires a review of multiple complex scenarios.But for older couples with a similar (high) income, the best bet may be for bothto just wait until 70.

If each person in the couple worked for at least 35 years and earned an incomeequal to or above the wage base limit (the maximum wage subject to SocialSecurity tax), they can max out their standard benefit.

If they then wait until 70 to also max out delayed retirement credits, they’llearn the highest possible Social Security check of $5,181 per month.

And if both earned an income above the wage base limit and are entitled to the max benefit, they’re each entitled to that $5,181, so they can get a total of $10,362 per month in Social Security benefits coming into their household.

Bottom line

Social Security is protected against inflation by COLAs, and it’s not going torun out as long as you live. Those two critical features alone make SocialSecurity checks extremely valuable. If you want to make the rightmoves for retirement, taking the time to maximize these benefits absolutelypays off.

So, give yourself the best chance of maxing out lifetime Social Securitybenefits by understanding all the different options for married couples andchoosing the strategy that is best for you and your spouse, given howmuch you each earned, your ages, and your goals for the future.

More from FinanceBuzz: