When you’re married, it’s a generally accepted rule that you’re supposed to try to consider your spouse’s needs as well as your own when making any sort of big decision. And that extends to Social Security.
The monthly Social Security benefit you collect in retirement will hinge on two factors:
How much you earned during your 35 highest-paid years in the workforce.
Your filing age.
You’re entitled to your complete monthly benefit based on your wage history at full retirement age (FRA), which is 67 if you were born in 1960 or later. You can also file as early as age 62 for a reduced benefit or delay your filing until 70 for a boosted benefit.
Generally speaking, if your health is poor going into retirement, it’s a good idea to consider an early Social Security filing. Despite a hit to your monthly benefit, filing early might actually result in more lifetime income.
When you’re single and in poor health, that’s a pretty easy decision. But if you’re married, you might have a real dilemma on your hands.
Let’s say you’re entitled to $2,000 a month from Social Security at an FRA of 67. If you sign up at age 62, you’ll shrink your monthly benefit to $1,400. But if you don’t expect to live beyond your early 70s, then an early filing makes sense.
Using these numbers, let’s imagine you pass away at 73. A Social Security filing at age 67 will give you a total lifetime benefit of $144,000. A filing at age 62 will give you a total lifetime benefit of $184,800. So that’s sort of a no-brainer.
The problem comes when you have a spouse to consider. Social Security pays survivors benefits to the spouses of deceased beneficiaries. At that point, your spouse will be entitled to 100% of your monthly benefit.
If you slash that by claiming at 62, you’ll leave your spouse with a monthly payday of $1,400. If you wait until FRA, your spouse will get $2,000 a month.
Now, we just saw that if you expect a pretty short life, an early filing makes financial sense for you. But what if your spouse outlives you by 20 years or more? In that case, an early filing by you might not make sense for your spouse. And that’s the problem.
In a situation like this, there’s not necessarily a right or a wrong answer. And so your best bet is to sit down together, run the numbers, and talk things through.
Your partner might encourage you to claim Social Security early so you can enjoy that money while you’re still alive — to take benefits at an age that allows you to do some things together, like travel.
Your spouse may also plan to return to a job in your absence. So in that case, a smaller survivors benefit each month might be just fine.
Either way, it’s important to have that conversation rather than make a decision on your own. That way, you can work through your options together, thereby lessening the chances that one of you will come away bitter or unhappy over the ultimate decision.
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