What is the Difference between Social Security Disability and Supplemental Security Income?
So you want to find a strategy for you and your spouse to optimize the most out of Social Security benefits? There are now SS calculators provided online where you can get an estimate of SS benefits you and your spouse can receive. All you have to do is answer a few questions about your financial history and then benefits are recommended to you. The recommendations are based on you and your spouse’s earnings as well as if you suspect that you and your spouse will live to or past the average life space. There are a few ways you can optimize your SS benefits. Here are a few ways to do this:
Whoever makes the most, should delay their benefits
When there is one partner who makes a significantly larger amount than the other, it is generally recommended to delay those partners' SS benefits until the age of 70. Delaying your SS is beneficial because
- Your benefits increase every month between 62 and 70, depending on how long you delay your benefits. This can be referred to as delayed retirement credit.
- When the spouse who brings home the most money, passes away, the surviving spouse with receive a monthly payment that the deceased spouse would receive. This will leave them with the maximum amount when you pass away.
What is the health status of the spouse who makes the least amount?
Though it makes the most sense to have the primary breadwinner delay these benefits, there is another strategy if the opposite spouse is in poor health. The spouse in poor health should claim their benefits early. This strategy will only be beneficial for those who have worked in the past.
If you turned 62 in 2015 or prior
If you are someone who turned 62 in 2015 or prior, you might be in luck for grandfathering any rules that restrict the SS application process. This can work to your benefit because you will not be held accountable for retiring prior to full retirement age. If your spouse retires at the full retirement age and begins receiving SS benefits, you can file a restricted application to start your benefits as well, based on your spouse. This can all be done while still delaying your benefits. This can only work if you’re both at full retirement age.
Social Security is commonly used as a primary source for those who reach retirement age. It is beneficial to do research prior to your retirement, so you can plan out your future and figure out monthly payments. Every couple's monthly income will be different considering it's based on personal working income and personal health. A retired couple averages roughly $2,260 per month in Social Security benefits. There are numerous ways to optimize your monthly income, but unfortunately, delaying your Social Security past the age of 70, will not increase your monthly income. Though delaying is a good option, you should also consider the other options and factors in each decision.