Social Security Q&A: What’s the Best Claiming Strategy for a Couple?

Social Security Q&A: What’s the Best Claiming Strategy for a Couple?
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Welcome to “Social Security Q&A.” You ask a Social Security question, and our guest expert provides the answer.

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This week’s question comes from Edward:

My wife turned 62 in October 2017 and received her first Social Security check for $520 in December. I am thinking about claiming my benefits of $2,830 in two years, when I reach my full retirement age (FRA). Should we pay back her benefits so that she can claim when I start my benefits? That way, she would receive half of my benefits, or $1,415. Both of us expect to live well into our 80s, given our family histories.

Right idea, but a bit late

Edward, determining the best claiming strategy for a couple is not an easy task. I used my firm’s software to analyze your case, and your current instincts are correct: Your wife should have claimed later, ideally at her FRA of 66 years and 2 months, given that you both have long life expectancies.

Unfortunately, your wife has just missed the opportunity to request a do-over. Under current rules, a beneficiary has only 12 months after starting benefits to pay back benefits and start over at a later date. In your wife’s case, it appears that she became eligible for benefits in November 2017, since she received her first check in December 2017. (The Social Security Administration always pays benefits one month late.)

All is not lost, however. Your wife’s spousal supplement to her retirement benefits depends on when you claim your retirement benefits. As soon as you claim your retirement benefits, she will automatically receive her spousal supplement, since she previously claimed her own benefits. So, if you claim benefits when she reaches her FRA, her spousal supplement will be maximized.

How much will she get? The maximum she can receive — including her own benefit and the spousal supplement — is half of your benefits at your FRA ($1,415), minus the early claiming penalty she incurred for claiming at 62. I calculate the early claiming monthly penalty to be about $152. So, in the end, she could receive as much as $1,263 (= $1,415 – $152). Keep in mind, however, if you claim before her FRA, she will get less than $1,263, because of an early claiming penalty on her spousal supplement. This is true even though her claim would be forced on her by the SSA as soon as you claim your benefits.

Edward, I apologize for the somewhat complicated answer. Social Security claiming decisions often involve complicated issues, requiring complicated answers. That is why one often benefits handsomely by getting professional help with such decisions.

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About me

I hold a doctorate in economics from the University of Wisconsin and taught economics at the University of Delaware for many years. In 2009, I co-founded SocialSecurityChoices.com, an internet company that provides advice on Social Security claiming decisions. You can learn more about that by clicking here.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

Disclaimer: We strive to provide accurate information with regard to the subject matter covered. It is offered with the understanding that we are not offering legal, accounting, investment or other professional advice or services, and that the SSA alone makes all final determinations on your eligibility for benefits and the benefit amounts. Our advice on claiming strategies does not comprise a comprehensive financial plan. You should consult with your financial adviser regarding your individual situation.

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