Social Security Claiming Strategies for Couples: Maximize Your Household Benefits

The nearer you get to retirement, the more decisions you have to make. For example, if you’re married, you need to decide on the best way to maximize your benefits as a couple. The tricky bit is picking through your options to find the best one for your household.

Here’s one option to consider.

One partner waits until 70, while the other files sooner

Let’s say one of you is due to receive a lower monthly Social Security benefit than the other. If that’s the case and there’s a need for immediate income in the home, the lower earner may file as early as 62. At the same time, the higher earner can delay their claim until age 70 when their benefits max out.

Of course, you can both wait until age 70 if you really want to maximize your retirement benefits. However, if you’re in a pinch and require the money now rather than later, 62 is the earliest you can claim.

The downside is that claiming before full retirement age (FRA) — age 67 for soon-to-be retirees — will permanently reduce your monthly benefits by up to 30%. That means if you’re due to receive $2,000 per month at age 67, making your claim at 62 will result in a monthly benefit of $1,400 — even after you reach FRA.

Still, if you need an infusion of cash now, one good way to handle it is for the higher-earning partner to wait until 70 to make their claim. Just as claiming early means receiving a lower monthly benefit, waiting past FRA to claim benefits results in a higher monthly payment for the rest of your life. If the higher-earning partner is due to receive $3,000, waiting until age 70 will boost that amount to $3,720 (8% extra for every year they wait, up to age 70).

Note: The amount a person can receive from retirement benefits maxes out at 70, so even if the higher-earning partner works past that age, their monthly benefit remains the same.

An eye on the future

Imagine you’re in your 80s when one of you dies. The remaining partner no longer receives both Social Security payments each month. Instead, they receive only the higher of the two benefit amounts. By waiting to claim until age 70, the higher-earning partner ensures that the remaining spouse receives the largest possible monthly benefit.

What’s more, the annual cost-of-living adjustment (COLA) is based on your Social Security benefit at the time. Let’s say the COLA for the year is 3%. That means if the higher earner receives a monthly benefit of $3,000, they’ll get a $90 bump, bringing their total to $3,090. However, if the higher earner waits until 70 and receives a $3,720 benefit, a 3% COLA would increase their monthly benefit by $112 to $3,832.

In other words, when at least one partner waits to make a Social Security claim, it benefits the household income each time there’s a COLA increase, and it benefits the partner who’s left behind when the other passes away.