Social Security Secrets Unlocked: Couples’ Guide To Smart Retirement Planning

Strategic planning for Social Security benefits can make a significant difference in retirement for couples about to take this important financial step.

At a Glance

The “file and suspend” strategy was discontinued in 2016.
Delaying benefits until age 70 can maximize income.
Coordination with a spouse’s earnings can be beneficial.
Survivor benefits need careful consideration.

Understanding Current Social Security Strategies

Social Security strategies have evolved over the years. The “file and suspend” strategy, a once-popular method, is no longer available after 2016. This strategy allowed one spouse to file for benefits and then suspend them, letting them grow while the couple collected a spousal benefit. Although this was a loss to strategic planning, there remain other ways couples can maximize their Social Security benefits.

Couples must consider several elements actively. Age, health, and total income encapsulate the basics that define Social Security claiming strategies. For instance, some may find it beneficial for both spouses to delay claiming benefits until the age of 70, thereby maximizing the total lifetime income received.

Are you eligible for both retirement and spouse's benefits? Here's what you need to know: https://t.co/pTR1zPMDy7 pic.twitter.com/LGBcKV9UZr

— Social Security (@SocialSecurity) December 6, 2023

Claiming Strategies and Retirement Age

For those born after January 2, 1954, the option of choosing between spousal and retirement benefits has been removed, placing greater emphasis on successful joint decision-making when it comes to filing strategies. A split strategy might suit some couples, where one spouse claims benefits early while the other delays—this applies in situations like having a disabled adult child or providing care.

According to the president of the National Association of Registered Social Security Analysts, Martha Shedden, “The longer you wait to claim, the more you’re going to get.”

The concept of Full Retirement Age (FRA), typically between 66 and 67, plays a vital role in determining when to start drawing benefits. FRA directly affects the monthly benefits, and thus it’s critical for couples to carefully plan when to retire and when to elect to start their benefits.

When planning for #retirement, it’s important for women to know the factors that could impact their monthly payment. Find out more here: https://t.co/wGsudMd3cA

— Social Security (@SocialSecurity) September 14, 2024

Securing Survivor Benefits for the Future

Another strategic consideration includes maximizing survivor benefits, especially if the higher-earning spouse is either older or experiencing health challenges. This ensures that in the unfortunate event of a spouse passing away, the survivor receives the higher benefit, thus maintaining financial stability. Couples should focus on aligning strategies to secure each other’s futures.

Furthermore, couples can benefit from discussing all available options, including the Primary Insurance Amount (PIA) and implications like taxes, Medicare premiums, and possible reductions due to government pensions. By addressing these before retirement, couples can better mitigate stress and ensure preparedness for future financial situations.