U.S. married couples have a unique opportunity to shape Social Security benefits in a way that maximizes program payouts.
If, that is, they know what they’re doing.
They may not know it, but married spouses can expand their Social Security benefits through savvy, well-timed claiming strategies. That’s primarily because married couples can claim Social Security benefits based not only on their own career record, but their spouses', too. That advantage, if taken, can provide spouses with some helpful flexibility in crafting a retirement income plan that maxes out payments at a time (or near retirement) when couples need the money most.
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Get going on your Social Security benefit hike campaign with these smart program management moves.Know your options before claiming Social Security
Social Security decisions are critical for married couples; however, the most impactful decision is often made years before an individual actually receives their first monthly check after the death of a spouse.“When one spouse dies, the remaining spouse cannot collect both monthly checks,” Andrew Gosselin, a certified public accountant and senior contributor at Save My Cent, told NTD News. “Instead, the remaining spouse will choose the higher of the two monthly checks.”
Incorporate any Social Security spousal decision into your broader financial plan
Gosselin advises his retirement-minded clients to consider Social Security as part of a household plan rather than simply making independent decisions regarding when to apply for benefits.“As the higher-earning spouse typically has more flexibility in terms of how much they delay receiving monthly payments, this will create greater long-term protection against loss of income for both members of the household and create a stronger survivor benefit,” he noted.
Factor inflation into any decisions
Couples tend to overlook another inflation protection, which should be a core component of any retirement financial plan.“Because Social Security income tends to grow with inflation, it can potentially increase its value over time,” Noam Korbl, personal finance analyst and chief financial officer at PropFirms, a forex trading firm, told NTD. “Many of today's common retirement investments, including stocks and bonds, don’t offer the same type of protection against inflation and can actually decline in value due to market downturns and spending errors.”
Get a professional review
For couples, the best path to smart spousal decisions is to have a Social Security Analysis completed with a trusted financial professional. That way, they can measure and maximize benefits and review how changes in claiming ages affect them.Don’t Make These Spousal Social Security Mistakes
One of the most common mistakes couples make is applying for their respective Social Security benefits immediately. “They do so erroneously upon reaching eligibility regardless of their earnings history, anticipated length of time living, or expected need for survivor benefits,” Gosselin said.Another common misconception regarding Social Security benefits is that spousal benefits can be combined to create a higher total monthly benefit. “However, Social Security is intended to allow coordination of benefits between spouses, not doubling up on those same benefits,” Gosselin added.
When a couple focuses solely on calculating their breakeven points, they often overlook the primary purpose of Social Security. “That means providing lifelong income security to individuals who will ultimately rely solely on this program for their survival,” Gosselin added.