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Social Security Strategies for Married Couples

The following is an excerpt from my book Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less.

In general, the primary factors that determine when married people should take Social Security are the same as those for determining when unmarried people should take Social Security:

  • The longer you expect to live, the more sense it makes to delay Social Security.
  • The more you care about maximizing your spendable income as opposed to maximizing the amount you leave to your heirs, the more sense it makes to delay Social Security.

If one spouse’s Social Security benefit is significantly higher than the other spouse’s, delaying benefits for the higher-earning spouse is often an especially good deal because it results in an increased payout for the longer of the two spouse’s lifetimes (due to survivor benefits).

In addition to the above considerations, however, there are two clever strategies available to married couples that (depending on circumstances) might allow them to maximize their Social Security benefits even further.

The “Restricted Application” Strategy

After reaching full retirement age, if you’re eligible for both spousal benefits and your own retirement benefit, you can choose to file for just one or the other. (This is in contrast to filing for one or the other prior to full retirement age, in which case you would automatically be deemed to have filed for the other benefit as well.)

EXAMPLE: Steve and Beth are both age 61, and they each have a full retirement age of 66. Beth’s earnings history is slightly higher than Steve’s, so they decide to have Beth delay her retirement benefit until age 70. However, to help with their near-term cash flow, they choose to have Steve take his benefits at age 62.

When Beth reaches full retirement age, she can file a “restricted application” for just her spousal benefit. Four years later, when Beth reaches age 70, she files for her own retirement benefit.

Result: Beth receives spousal benefits for four years (from age 66 to 70) at essentially no cost to her, since her own retirement benefit is growing the entire time because she had not yet filed for it. Depending on the size of Steve’s primary insurance amount, these four years of spousal benefits could be a large five-figure sum — which Beth and Steve would miss out on entirely if they were less familiar with the Social Security rules.

The “File and Suspend” Strategy

Alternatively, if you are full retirement age, you can apply for your own retirement benefit, then ask to have payments suspended. This satisfies the requirement that you must have claimed your own benefit in order for your spouse to receive a spouse’s benefit, but because you are not actually receiving your own retirement benefit, your benefit continues to grow until age 70.

EXAMPLE: Katie and Joe are married. They are both age 62, and they both have a full retirement age of 66. Joe has earned substantially more than Katie over the course of their careers — so much more, in fact, that Katie’s spousal benefit is going to be almost twice the size of her own retirement benefit.

Like Steve and Beth above, Katie and Joe decide to have the higher earner wait until 70 and the lower earner claim as early as possible at age 62. So far, this is the same as the “restricted application” strategy outlined above. At full retirement age, however, the strategies diverge.

Once Joe reaches full retirement age, instead of filing a restricted application for just spousal benefits, he files for his own benefit and asks to have payments immediately suspended. This allows Katie to switch to her (larger) spousal benefit, and it allows Joe’s own retirement benefit (and Katie’s survivor benefit, if she should outlive him) to continue growing until Joe reaches age 70.

In general, the file and suspend strategy will only be preferable to the restricted application strategy  if the higher-earning spouse has a primary insurance amount that’s significantly larger than the lower-earning spouse’s primary insurance amount. (The exact necessary difference depends on the difference in ages between spouses.)

Combining Both Strategies

If both spouses want to delay their own retirement benefit until age 70, it may be possible to combine the two strategies above in order to get 3-4 years of drawback-free spousal benefits for one spouse.

EXAMPLE: Christopher and Patricia are married, and they both reached their full retirement age of 66 this year. They have similar earnings histories, and they both want to delay their retirement benefits until age 70.

Upon reaching full retirement age, Patricia files for benefits and asks to have payments immediately suspended. Christopher (who has also reached full retirement age) then files a restricted application for spousal benefits only. Then, at age 70, Christopher switches to his own retirement benefit, and Patricia ends the suspension of her benefit payments.

Result: Christopher is able to receive spousal benefits for four years (from age 66 to 70), while they both allow their own retirement benefits to grow until age 70.

Simple Summary

  • It’s often a good idea to have the spouse with the higher primary insurance amount delay taking benefits, because doing so increases the amount the couple receives as long as either spouse is alive.
  • It’s less advantageous to have the spouse with the lower primary insurance amount delay benefits, because doing so only increases the amount the couple will receive while they’re both alive. That said, depending on circumstances, it can still be a good idea for the lower earner to delay benefits.
  • With clever planning, it’s often possible to have one spouse receive spousal benefits for the years between full retirement age and age 70, while allowing the higher-earning spouse’s own retirement benefit to continue growing until age 70.

Want to Learn More about Social Security? Pick Up a Copy of My Book:

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less
Topics Covered in the Book:
  • How retirement benefits, spousal benefits, and widow(er) benefits are calculated,
  • How to decide the best age to claim your benefit,
  • How Social Security benefits are taxed and how that affects tax planning,
  • Click here to see the full list.

A Testimonial from a Reader on Amazon:

"An excellent review of various facts and decision-making components associated with the Social Security benefits. The book provides a lot of very useful information within small space."
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