How Can Couples Max Out Social Security Benefits?

Posted: May 25, 2017 12:01 AM
How Can Couples Max Out Social Security Benefits?

Dear Carrie, My husband and I are both 64 and still working. He makes more money than I do and had been planning to file and suspend his Social Security benefit in two years so I could collect a spousal benefit while his continued to grow. Since that's no longer allowed, is there a new strategy we can use to maximize our benefits? -- A Reader 

Dear Reader, The 2015 Budget Act dramatically shifted the landscape for couples attempting to maximize their Social Security benefits. As you've discovered, just when many of us had our plans in place, we've been forced to reevaluate. Fortunately, there are some strategies that still work. But before I get into those, let's review what's changed.

First, as you indicate, the old file and suspend strategy is no longer available to new filers. Now when a person suspends their own benefit, they also suspend spousal benefits. This effectively prevents one spouse from collecting benefits on their husband's or wife's record while the other spouse holds off in order to accrue delayed retirement credits. It was great while it lasted.

The second related, but different, change impacts what is known as a restricted application. For many years, this provision allowed a married person to collect a benefit based on their spouse's work record rather their own record as long as their spouse had already filed. In this way, at full retirement age, a spouse could file for a spousal benefit only and then switch to their own increased benefit at a later date.

So where does this leave you -- and the millions of other couples who are grappling with the new rules? Unfortunately, there's no one-size-fits-all recommendation. Each couple's financial situation, birth dates, relative ages, anticipated longevity, and earnings records factor in.

Because of this complexity, it generally makes sense to consult with an advisor who specializes in Social Security benefits before deciding. In the meantime, here are a few guidelines to consider:

--A primary breadwinner should consider delaying filing to age 70. Assuming good health and the prospect for a long life, this makes sense for two reasons. First, it can eventually add up to a larger lifetime benefit. And second, it will mean an increased benefit for a surviving spouse.

--It may make sense for the lower earning spouse to file for their own benefit at Full Retirement Age. The tactics will vary, however, depending on birthdate. Here are a couple of examples:

Let's say, as the lower earner, you file for benefits at your FRA. Since your husband turned 62 before the end of 2015, at his FRA he could file a restricted application for spousal benefits. He could then switch to his own higher benefit at age 70. Plus, since you waited until FRA to file for your own benefit, your benefit could increase if the spousal benefit were higher than your own benefit.

If, on the other hand, your husband had not turned 62 by the end of 2015, and wasn't eligible to file a restricted application, it would still likely make sense for you to wait until at least your FRA to file for your own benefit and your husband to wait until age 70 to file. Your benefit could still increase to a potentially higher spousal benefit of 50 percent of his FRA benefit.

Should your husband pre-decease you, you would receive a higher survivor benefit by his delaying to age 70 in either case.

--If both partners have equivalent earnings records, it may make sense for both to delay filing until age 70. Provided that both anticipate a long life and can afford to postpone benefits, this would maximize both retirement benefits for themselves and survivor benefits for each other.

--Married couples with a single income face a different set of issues. Although health and anticipated longevity certainly come into play, it often makes sense for the breadwinner to postpone benefits until age 70. While the couple will forego spousal benefits until the earner files, it will allow for the largest possible retirement and survivor benefits. Other couples, however, may want the earner to file once the spouse reaches FRA, which is when the spousal benefit maxes out (the spouse would need to be at their FRA to be eligible to claim the maximum spousal benefit). In this case, though, they are forfeiting the highest survivor benefit.

While the new law in some ways simplified things, it's still a complex and important decision. So I can certainly appreciate that many people may take one look at all this and want to run for cover. But I strongly advise every person approaching retirement age to stop and carefully assess their Social Security choices. Timing is important and there are still strategies -- especially for couples -- that can result in a higher overall benefit. Sit down with your advisor to help you make the best decision based on your situation.

Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER(tm), is president of Charles Schwab Foundation and author of The Charles Schwab Guide to Finances After Fifty, available in bookstores nationwide. Read more at You can e-mail Carrie at information on this website is for educational purposes only. It is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at