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Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand. |
Determining when to take Social Security is an important financial decision, impacting not only how much your benefit will be, but also the amount of your spouse's benefit. Maximizing Social Security Benefits for Married Couples By Britt Erica Tunick Social Security is likely a key part of the money you are planning to live off of when you retire, but if you are married and don’t approach Social Security strategically, you could find yourself leaving money on the table when you do so. Based on the current Social Security system, anyone born after 1929 who has spent a minimum of 10 years in the work force is eligible to begin collecting Social Security benefits as soon as they reach age 62. For anyone born between 1943 and 1954, however, the full retirement age is 66 (it is 67 if you were born in 1960 or later) and collecting before then means forfeiting a percentage of the full amount you would be eligible for if you waited until age 66. And if you are married, you may want to wait as long as age 70 depending on how much you make compared to your spouse. Since married couples do not have to start collecting Social Security at the same time, if the higher-earning spouse waits until age 70 to start collecting their Social Security benefits, it could mean up to an additional 8% in monthly payments once they do start collecting for both themselves and their spouse. That’s because a spouse has the ability to choose between claiming Social Security benefits based on their own income history, or up to 50% of their spouse’s benefits payments that they will be eligible to receive throughout their life, even if they outlive the original claimant. Additionally, a surviving spouse can also take advantage of the Social Security survivor benefit and is eligible to receive the full amount of their deceased spouse’s payments if they are greater than their own. Needless to say, that could mean some significant additional money, given the ever increasing life expectancy rates for people living in the U.S. these days. Based on data from the Social Security Administration, the average man who is age 65 today is expected to live until age 84.3, while the average woman who is age 65 today is expected to live until age 86.7, and one in four 65-year-olds will live past age 90. Since health is a major factor in a couple’s retirement decisions, as well as how much a couple has managed to save for retirement outside of their Social Security benefits, determining when it is best to begin taking Social Security benefits is a decision that varies from couple to couple. If there are significant health concerns, or other factors to suggest that a couple will have a shorter life expectancy and therefore a shorter retirement length, waiting until age 70 may not be the best approach to take. |
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