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Planning for retirement

Married couples have Social Security options

With just a little planning, you and your spouse can make the most of your Social Security benefits.
12 minute read

Points to know

  • Coordinating your benefits with your spouse's benefits can help you both get the most out of your Social Security payments.
  • In some cases, it makes sense for both spouses to claim on the same spouse's earnings record.
  • Many couples use a "split strategy," which means they begin claiming at different ages. It might be worthwhile for the higher earner to wait longer to collect.

Start with benefits estimates for you & your spouse

Your first step in maximizing your Social Security benefits should be to visit the Social Security Administration (SSA) website.

GET YOUR SOCIAL SECURITY ESTIMATES

The SSA website provides estimates for how much you'll collect if you start receiving benefits at age 62, your full retirement age (FRA) (between 66 and 67), and age 70. Remember that you don't have to start taking your benefits at those milestone ages; you and your spouse can start collecting anytime between ages 62 and 70.

Who's the higher earner?

Compare the estimates for you and your spouse, and pay special attention to the difference between your estimates. The higher earner is the spouse with the larger primary insurance amounts (PIA).

When you're deciding who will collect first and who should wait, consider having the lower earner collect first and having the higher earner wait. Over time, the higher earner's increases will be worth more than the lower earner's increases.

And if one spouse's estimates are more than twice as high as the other's, it might make sense for both of you eventually to collect on the same spouse's earnings record.

In that situation, the spouse with the lower benefits can claim first based on his or her own earnings record and apply for spousal benefits later when the spouse with the higher benefits starts to collect.

The longer the spouse with the higher benefit waits to start collecting, the higher benefits will be for both spouses. Delaying the higher earning spouse's benefits could also eventually increase the other spouse's survivors benefits.

Factors that could reduce your payments

Before you plug your Social Security estimates into your retirement plan, be sure to adjust those estimates if any of these factors apply to see how much you might actually end up with.

Working while you collect Social Security may temporarily reduce your benefits

You may pay federal & state taxes on your payments

Your Medicare premiums may be deducted from your payments

A government pension could decrease your benefits

Figure out the best time for you and your spouse to claim Social Security

As you consider the right time to start collecting Social Security, remember that if you decide to delay, you can revisit that decision as often as you'd like.

Anyone who's paid Social Security taxes for at least 10 years can start to receive retirement benefits as early as age 62 based on his or her own earnings record. A married spouse without an earnings record (or whose record would result in a lower Social Security payment) can collect on his or her spouse's earnings record when his or her spouse turns 62.

Collecting Social Security at 62 has some advantages. For example, you may be ready to retire and counting on Social Security as the cornerstone of your retirement plan. After all, if you've paid Social Security taxes for 10 years, then you're entitled to Social Security benefits.

If you or your spouse has serious health problems or a family history that suggests you may not live long enough to profit from waiting, collecting early might make the most sense for you. Just remember that if the higher earner delays, the surviving spouse's survivors benefits could also increase.

On the other hand, the earlier you start to collect, the less you'll receive each month. But if you start to collect and then change your mind, you have 2 options.

The "reset" rule

Within 12 months of starting to collect, you can "reset" your benefits to erase the reduction, but you must repay all of the benefits you and your family earned.

See how it works: The "reset" rule


The voluntary suspension rule

If you started collecting before your full retirement age (FRA), you can suspend your benefits at FRA and restart them later.

See how it works: Voluntary suspension

Anyone who's paid Social Security taxes for at least 10 years can start to receive retirement benefits as early as age 62 based on his or her own earnings record. A married spouse without an earnings record (or whose record would result in a lower Social Security payment) can collect on his or her spouse's earnings record when his or her spouse turns 62.

Collecting Social Security at 62 has some advantages. For example, you may be ready to retire and counting on Social Security as the cornerstone of your retirement plan. After all, if you've paid Social Security taxes for 10 years, then you're entitled to Social Security benefits.

If you or your spouse has serious health problems or a family history that suggests you may not live long enough to profit from waiting, collecting early might make the most sense for you. Just remember that if the higher earner delays, the surviving spouse's survivors benefits could also increase.

On the other hand, the earlier you start to collect, the less you'll receive each month. But if you start to collect and then change your mind, you have 2 options.

The "reset" rule

Within 12 months of starting to collect, you can "reset" your benefits to erase the reduction, but you must repay all of the benefits you and your family earned.

See how it works: The "reset" rule


The voluntary suspension rule

If you started collecting before your full retirement age (FRA), you can suspend your benefits at FRA and restart them later.

See how it works: Voluntary suspension

If you start collecting Social Security retirement benefits at your full retirement age (FRA), you'll receive 100% of your primary insurance amount (PIA). But remember that you can collect more than 100% of your PIA by waiting beyond your FRA.

You'll earn an extra 0.67% each month that you delay your Social Security benefits past your FRA. That's an extra 8% for each year that you wait past FRA … and what other investment can guarantee an 8% annual increase?*

Since it's unlikely that you and your spouse were born on the same day, the two of you will stagger your start dates if you both collect at your respective FRAs.

If you're planning on staggering your start dates anyway, consider delaying the higher earner's start date beyond his or her FRA, since the higher earner's payments will increase by a higher percentage as a result of waiting.

If you or your spouse (or even both of you!) can wait until you're 70, you'll receive your highest Social Security payments—up to 132% of your primary insurance amount (PIA) if your full retirement age (FRA) is 66, and 124% of your PIA if your FRA is 67.

Even if married couples start collecting on the same date, they're almost always different ages. Claiming at different ages is called a "split strategy."

Remember that the longer you wait, the more you'll receive—that's true for everyone. And if you decide that one of you will wait longer than the other to start collecting, it makes more sense for the higher earner to wait.

In other words, the split strategy that many couples use is to have the lower earner collect first for as long as the couple can manage their finances on one Social Security payment. Then, when the higher earner begins to collect, his or her payments will have increased more than the lower earner's would have, and the surviving spouse's survivors benefits would also increase.

See how it works: Split strategy

Even if married couples start collecting on the same date, they're almost always different ages. Claiming at different ages is called a "split strategy."

Remember that the longer you wait, the more you'll receive—that's true for everyone. And if you decide that one of you will wait longer than the other to start collecting, it makes more sense for the higher earner to wait.

In other words, the split strategy that many couples use is to have the lower earner collect first for as long as the couple can manage their finances on one Social Security payment. Then, when the higher earner begins to collect, his or her payments will have increased more than the lower earner's would have, and the surviving spouse's survivors benefits would also increase.

See how it works: Split strategy

An advanced claiming strategy (if one spouse reached 62 by 2015)

If you or your spouse reached age 62 by the end of 2015, you qualify for a Social Security claiming strategy called restricted application.

Here's how it works: The younger spouse (who doesn't need to have turned 62 at the end of 2015) claims Social Security benefits based on his or her own earnings record.

When the older spouse (who must have been 62 at the end of 2015) reaches full retirement age (FRA), he or she files a restricted application for spousal benefits only. At that point, both spouses are claiming benefits based on the younger spouse's earnings record.

Then, at age 70, the older spouse claims benefits based on his or her own earnings record, which have increased to 132% of what that spouse would've been eligible for at FRA.

See how it works: Restricted application

What's next?

Social Security provides more than just retirement benefits. And the federal government offers more than just Social Security benefits. As you put your retirement plan together, check to see whether you qualify for other government benefits, such as family and children services, tax assistance, and active military or veterans benefits.

Apply for Social Security

You can file for Social Security benefits online, over the phone, or in person at a local Social Security Administration office.

You may need to produce these documents when you apply

  • Your Social Security card.
  • An original birth certificate or other proof of your birth.
  • A copy of your W-2 form or self-employment tax return for the previous year.
  • Your marriage certificate.
  • If you weren't born in the United States, proof of U.S. citizenship or lawful alien status.

A Vanguard advisor can help

If you're struggling with making your best Social Security decision, we can help. You'll also get a custom financial plan, ongoing portfolio management, investment coaching, and real-time goal tracking—all at a low cost.

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Partner with a Vanguard advisor or call 800-962-5028 to speak with an investment professional.

*The amount of your monthly benefits also increases for each month you wait between age 62 and your FRA, but the rate is lower than 8% per year and varies depending on your age.

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