How To Maximize Social Security For Married Couples. Different strategies to get the most for you!

hey guys this is jason certified financial planner and host of fighting words financial in this video today we're going to talk about how to maximize social security benefits for married couples it's just a fact that married couples have more social security options than single people do and with just a little planning you and your spouse can maximize your social security benefits in a way that's most suitable for you now there's a couple things to note before we get started number one there are more options and strategies than we're going to cover in this video today number two coordinating your strategy with your spouse will help you get the most out of your social security benefits for you guys as a couple number three it doesn't always make sense to claim your own social security benefit many couples employ a split strategy it fits their needs with one person taking the benefit earlier and the other one waiting to collect later if you and your spouse are approaching retirement and you have questions about social security the very first thing you should do is either schedule a visit with your local social security office or go to the social security administration website what you're looking for is an estimate of benefits for both you and your spouse now these used to be sent out annually after you reach a certain age but this policy was discontinued a few years ago the social security administration provides estimates for how much you collect if you start receiving benefits at the earliest opportunity at age 62 your full retirement age depending on when you're born that'll be somewhere between 66 and 67 or the maximum age of seven you don't have to start taking your benefits at any particular age or any of those milestones that i mentioned you and your spouse can start collecting any time between the ages of 62 and 70. the second thing to do is determine which of you was the higher income earner while you worked don't rely on your earnings from the last couple of years compare the estimates you receive from the social security administration for both you and your spouse the higher earning spouse is the one with the higher primary insurance amount well what is the primary insurance amount the social security administration bases your benefits on your lifetime earnings calculated over your 35 highest earning years reported to the social security administration the earnings are indexed to account for changes in average wages since the year those earnings were received then social security calculates your average index monthly earnings over those 35 years in which you earn the most they then apply a standard formula to those earnings and arrive at your basic benefit or what is called your primary insurance amount which is how much you will receive at your full retirement age it's important to note here that from age 62 to age 70 for each month that you delay the beginning of your social security benefit your benefit will actually grow taking social security at the earliest opportunity age 62 will cause your benefit to be reduced permanently by up to 30 percent third if you are trying to determine who will collect first and who should wait in most cases the lower earner should collect first and the higher earner should wait over time if the higher earner delays taking their social security benefit their benefit is going to grow on a monthly basis increases on the higher earners benefit will be worth more than increases on the lower earners benefit should they be the one to delay taking it if that is a path you choose to take the longer the spouse with the higher benefit waits to start collecting the higher those benefits will be for both spouses delaying the higher earners benefits could also eventually increase the other spouse's survivor benefits for more information on social security survivor benefits please see my earlier video series on that subject i'll leave a link to that in the description additionally if one spouse's estimates are more than twice as high as the others it might make sense for the lower earner not to collect benefits on his or her own earnings record at all but to collect on the higher earning spouse's record in that situation if your spouse has not yet received retirement benefits you can claim on your own social security beginning at 62 and then make the switch to spousal benefits when your husband or wife files social security will not pay both your retirement and your spousal benefits you'll get the higher of the two benefits if your spouse is already getting social security when you claim benefits you are subject to the deemed filing rule under this provision you don't have a choice whether to wait and switch when you apply for your retirement benefit you're also automatically deemed to be applying for spousal benefits if you're entitled to them again social security will pay the greater of the two benefit amounts fourth understand that there are some factors that can reduce your social security payments as you're working on your retirement plan it's important to keep these in mind subject to certain income limits you may pay federal and state income taxes on your social security benefits and you may elect to have them withheld from your check you may elect to have your medicare part b and part d premiums deducted from your payments certain types of government benefits can reduce your social security benefits because your government employer was not withholding social security taxes from your salary these are typically pensions from state and local governments fifth as you consider the right time to start collecting social security remember that if you decide to delay you can change your mind at any time and start collecting here are a few things to know when trying to make that decision anyone in all who's paid social security taxes for at least 40 quarters or in other words 10 years of work can start receiving retirement benefits as early as 62 based on his or her own earnings record a married spouse without earnings without any record of their own or those whose record would result in a lower social security payment can collect on his or her spouse's earnings record when their spouse turns 62. collecting on social security at 62 does have some advantages for example you may be ready to retire or you may not have a choice due to unemployment or other reasons and you have to depend on social security as the backbone of your retirement plan if you paid social security taxes for 10 years then you're entitled to social security benefits full stop if you or your spouse has serious health problems or a family history that suggests your life expectancy is reduced and you may not live long enough to profit from waiting collecting early might make a lot of sense for you if you start taking benefits at age 62. just remember that the higher earner in the couple delays the surviving spouses survivor benefits would also increase on the other hand the earlier you start to collect the less you'll receive each month thankfully if you start to collect and then change your mind you do have a couple of options the first option is the reset rule if within 12 months of starting to collect something happens like a financial windfall or you simply decide on a different strategy you can elect to reset your benefits and erase the reduction but you must repay all the benefits that you and your family collected since you started taking your benefit there's also something called the voluntary suspension rule if you started collecting before your full retirement age you can elect to suspend your benefits at full retirement age and then start them back up again at age 70. during the time the benefits are suspended your monthly benefit amount will actually grow by about roughly eight percent a year if you both start collecting social security retirement benefits at your full retirement age you'll both receive 100 of your primary insurance amount but remember that you can collect more than 100 of your primary insurance amount by weighting beyond your full retirement age you'll earn an extra 0.67 percent each month that you delay your social security benefits beyond your full retirement age that's an extra eight percent for each year that you wait past your full retirement age and what other investment can guarantee an eight percent annual return since it's highly unlikely that you and your spouse were born on the same day the two of you will probably stagger your start dates if you both start collecting at your respective full retirement ages if you're planning on staggering your start dates anyway consider delaying the higher earner's start date beyond his or her full retirement age since the higher earners payments will increase by a higher dollar amount as a result of waiting delaying benefits for the higher earner makes a lot of sense particularly if the lower earning spouse might have a much longer life expectancy than the primary earner due to health issues or family history another strategy is to both wait until your age 70 to claim benefits if you or your spouse or even both of you can wait until you're 70 because you have alternate sources of income you'll receive your highest social security payments up to 132 of your primary insurance amount if your full retirement age is 66 and up to 124 of your primary insurance amount if your full retirement age is 67. you and your spouse may choose to claim using a split strategy this is very very common even if married couples start collecting on the same date they're almost always different ages claiming at different ages is called split strategy remember the longer you wait the more you receive that's true for everyone and if you decide that one of you will wait longer 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 lower earners would have and the surviving spouse's survivor benefits would also increase this is probably the most common strategy for couples that actually have any strategy at all when it comes to starting their benefits there is one last advanced claiming strategy but it only applies if one spouse reached age 62 before 2015. if so you qualify for a social security claiming strategy called the restricted application here's how it works the younger spouse who doesn't need to have turned 62 by 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 by the end of 2015 reaches full retirement age 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 on his or her own earnings record which by then will have increased up to 132 percent of what the spouse would have been eligible for at full retirement age this strategy is primarily used to maximize survivor benefits okay guys i hope that helps you to outline a couple of basic strategies and to understand your options when it comes to maximizing social security benefits as a married couple thanks for watching and i'll see you next time you

Channel: Fighting Words Financial

Views: 20,400

Keywords: spousal social security, social security spousal benefits, social security benefits, social security benefits explained, retirement planning, financial planning, social security married couples, social security benefits for married couples, maximize social security, maximize social security for married couple, maximize social security for couples, retirement income, social security claiming strategies, get the most social, how to get the most from social security

Id: F2E1Zul_pkQ

Length: 10min 41sec (641 seconds)

Published: Sun Aug 30 2020