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This article is going to present a couple of techniques
around spousal benefits that you may be able to use to increase our monthly
social security check.
The big question with Social Security is when to start
taking it. Most people are eligible to
start collecting once they turn 62, however if you wait until you are 66 years
old your monthly check will be 33% larger.
If you wait even longer until you turn 70, your monthly check will be
76% larger than if you started collecting at age 62.
If you are married (or divorced after 10 years of marriage
and have not remarried) you can claim a benefit not only on your work record
but also on your spouses. The benefits
cannot be collected simultaneously, but they can be taken continuously.
Technique: File first
to get a spousal benefit, and later file to get your own benefit after it has
grown to as large as possible.
Example - A Two Income Couple
Bob is 66, Kathy is 62
Both Bob and Kathy will qualify for $2000 / month of social
security benefits at their Full Retirement Age (FRA)
Current Plan
Kathy is planning on filing now on her own benefits and will
collect $1500/month
Bob will wait until he is 70 and will get $2640/ month
Better Plan
When Kathy applies for her benefit, Bob
should apply only for a spousal benefit.
As a spouse Bob will get 50% of the $2000
Kathy is entitled to.
At age 70, Bob can switch to his own
$2640 benefit
Net Result : Bob
and Kathy will have collected an additional $48,000 dollars of Social Security
Benefits by implementing the better plan.
Example - A One Income Couple
Tom is 64 works full time and at FRA his
benefits will be $2000/month
Sandra is 60 years old and
is a homemaker
Current Plan
Tom plans on waiting until
he is 8 to collect $2320 / month
Better Plan
Start collecting $2000/month at age
66. This allows Sandra to file for
spousal benefit
Tom then suspends his benefit until he is
68 as originally planned
Sandra is still able to collect $650 /
month (She is only 62)
Net Result: Tom and Sandra
would have collected an additional $15,600 by implementing the Better Plan
Each family has their own individual scenario when it comes
to selecting social security benefits.
In some cases it will make sense to strategically take the spousal
benefits, while in other situations it will not be useful. It is important to explore the different
options you have with Social Security benefits and not just start collecting
once you hit the age of 62.
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