Dear Savvy Senior: I've heard that there are strategies available that can help married couples increase their Social Security benefits when they retire. My wife and I are approaching retirement age and would like to understand these options. What can you tell us?
-- Getting Prepared
Dear Getting: If you're willing to wait to full retirement age and beyond, married couples have several unique claiming options that could actually add tens of thousands of dollars to your Social Security checks over your retirement. Here's what you should know.
Waiting Strategy
Before we go over the different benefit boosting options for married couples, it's important to know that the most commonly used strategy for increasing retirement benefits is to delay taking them.
While workers can start collecting their Social Security retirement benefits as early as age 62, postponing them to full retirement age (which is 66 if you were born between 1943 and 1954), or better yet to age 70, can make a big difference.
Let's say, for example, that you're eligible for a $1,200 monthly benefit at age 62. By waiting to 66 your monthly benefit would increase to $1,600. And by delaying to age 70, you would boost your benefit a whopping 76 percent to $2,112. Delaying will also increase your wife's survivor benefit if you die first. Waiting, however, beyond age 70 will not increase your benefits.
Claim and Suspend
In addition to waiting, Social Security also offers two other little known strategies for married couples, but you must be at least full retirement age (currently 66) to use them.
The first one is called "claim and suspend," which allows a worker at full retirement age to file for Social Security so their spouse can begin collecting a spousal benefit, but asks to receive their own benefit later.
This is best suited for one-earner couples where one spouse worked full-time and the other spouse did not work outside the home or did not work long enough to qualify for Social Security retirement benefits.
Here's an example of how it works: Let's say that you are age 66, but want to keep working until 70 to collect a higher benefit. Let's also say your wife is a nonworking spouse who just turned 62 and would like to start receiving spousal benefits on your work record. The problem is she can't get them until you sign up. So you file for your Social Security benefits but request an immediate suspension which allows your wife to claim spousal benefits, without locking you into a lower payment for life. Then when you do decide to start collecting, at age 70, you end the suspension and receive a higher benefit for delaying.
This strategy can also be used if you have children under 18, or 19 if they are still attending high school, or are disabled. Each dependent child is eligible for up to 50 percent of the retiree's full benefit. And, if any child is younger than 16, your spouse can also qualify for additional benefits as a caregiver, even if she's under age 62.
Claim Twice
For two-career couples, the second strategy, known as "claim twice," lets you collect Social Security (at full retirement age) first as a spouse and later using your own work record.
Here's how it works: Let's say that you are 66 and would like to continue working until age 70. But, your wife started collecting her benefits on her own work record at age 64. You could file a "restricted" application with Social Security and collect a spousal benefit which is half of what your wife gets. Then, once you reach 70, you stop receiving the spousal benefit and switch to your own benefit, which will be 32 percent higher than the benefit you would have collected at your full retirement age.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of "The Savvy Senior" book.
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