Retirement Social Security

"It’s essential to compare the estimates between spouses very carefully. The individual with a higher income will be the one with the larger primary insurance amount."

Most people start saving for retirement at a reasonably young age and count on the benefits promised through Social Security. However, there are many different ways to claim those benefits. Using the wrong claiming strategy can cost thousands of dollars, which is why I share my insight on Social Security options for married couples.

Get estimates

To maximize Social Security benefits, visit the Social Security Administration website. There, you can get an estimate of how much you’ll be able to start collecting at any age between 62 and 70.

Identify the higher earner

It’s essential to compare the estimates between spouses very carefully. The individual with a higher income will be the one with the larger primary insurance amount. Have the lower earner collect first because the higher earner’s increases will be worth more.

In the instance where one spouse earns twice as much as the other, it might be best for both to collect on the same spouse’s earning record. The longer the higher earner waits to collect, the higher the benefits will be for the couple. This will also reflect a higher survivor benefit, at the death of the first spouse.

Reduce payments

Many factors can impact the payout of Social Security benefits. It’s important to have the help of a professional when navigating all the possibilities of looking for the best strategy.

Many people don’t realize that working while collecting Social Security payments can reduce their benefits. Additionly, government pensions, federal and state taxes and Medicare premiums can decrease benefits.

62 by 2015?

An advanced Social Security claiming strategy may be available if you or your spouse became 62 years old by the end of 2015.

If one spouse is younger, and under the age of 62, they can claim benefits on their personal earnings record. The spouse who is 62 or older waits to reach full retirement age, and files an application intended only for spousal benefits. This allows the couple to temporarily claim benefits based on the younger spouses earning record. (The younger spouse must have claimed their benefit, opened their record for the older spouse to be able to claim spousal benefits on their record.)

The real savings happen when the older spouse then turns 70. They can now claim benefits based on their earnings record, which will have increased by approximately 132% of what they would have been qualified for at FRA.

- As the founder of Bergen Financial Group, Darcy Bergen brings over 22 years of experience in the financial services industry. Bergen is a certified retirement financial manager and a NAFA (National Association for Fixed Annuities) member. For more information, visit bergenfinancialgroup.com.