How Married Couples Can Coordinate Claiming Strategies to Maximize Lifetime Income

Married couples have a unique opportunity to maximize their household Social Security benefits by coordinating their claiming strategies. But too often, couples treat the decision about when to apply for benefits as an individual one, and they wind up with less than they deserve as a result.

All it takes to avoid this mistake is a quick sit-down with your spouse and an understanding of a few key factors that affect your checks. Here's a look at three common scenarios, and how you may want to approach them.

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When only one spouse qualifies for retirement benefits

When only one person worked long enough to qualify for Social Security retirement benefits, the other would only be able to claim a spousal benefit. This is worth up to one-half of the benefit the retired worker qualifies for at their full retirement age (FRA), which is 67 for most people.

The person claiming the spousal benefit will not be able to apply for checks until the retired worker has signed up, so you must first decide when they should claim. You'll have to factor in life expectancy and your finances when weighing this. But you'll also want to consider how it will affect the partner claiming spousal Social Security.

Spousal benefits grow a little each month you delay your application, but only until you reach your FRA, unlike retirement benefits, which max out at 70. If a retired worker delays Social Security until they qualify for a larger benefit, they could inadvertently reduce their spouse's lifetime benefit. So sometimes it makes sense for the retired worker to apply a bit earlier than they would if they were single, so their spouse can sign up, too.

When both spouses qualify for retirement benefits and have similar earnings histories

When both people qualify for retirement benefits, you'll be eligible for these checks and spousal benefits. But if you both have similar earnings histories, your retirement benefits will likely be larger than your spousal benefits.

Barring health or financial issues, many couples in this situation find they can maximize their household benefits by having both spouses delay Social Security until their FRA or beyond. This move increases your monthly benefit, but it also means you'll have to continue working or live off personal savings until you're ready to apply.

If one person has a shorter life expectancy or you don't think you can afford to delay benefits, it could make sense for one spouse to apply early. The other person could still wait to sign up if they wanted to try to increase their lifetime benefit.

When both spouses qualify for retirement benefits, and there's a big income disparity

For couples where one person has significantly outearned the other, a popular strategy is for the lower earner to claim their retirement benefit early. This gives the couple some benefits to supplement their personal savings while the higher earner delays Social Security until they qualify for larger checks.

When the higher earner applies for retirement benefits, the lower earner can switch to a spousal benefit if it's worth more than what they're currently receiving. You may need to contact the Social Security Administration to request this change.

Again, you and your spouse may need to adjust this strategy if financial constraints or health issues make it difficult to adhere to. It's OK to apply earlier if that works better for you.

Just make sure you and your spouse are on the same page about when each of you plans to apply. If either of you wants to change the plan down the road, let the other person know, and don't forget to consider how the change could affect your retirement budget.

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