Unlocking Social Security: Essential Rules for Married Retirees

Receiving Social Security retirement benefits may seem simple: work for years, file when eligible, and receive your payments. However, married couples face unique challenges. Here are three crucial Social Security rules for married retirees to consider.

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1. Timing of Benefit Claims Can Significantly Impact Payouts

One spouse can claim Social Security retirement benefits based on the other spouse’s earnings history. The timing of when the higher-earning spouse claims these benefits is crucial.

For instance, consider Fred and his wife Wilma. Wilma earned significantly more during their careers, meaning Fred is eligible for up to 50% of her benefits at her full retirement age (FRA). However, if Wilma decides to retire early, this reduces both her benefits and Fred’s potential payout.

If Wilma waits until age 70 to claim her benefits, she increases her benefits, but Fred’s spousal benefit remains capped at half of her FRA benefit. Nonetheless, this may enhance Fred’s survivor benefits, should they need to be claimed after Wilma’s passing.

2. Switching from Personal to Spousal Benefits Can Maximize Earnings

Another lesser-known rule allows lower-earning spouses to first claim benefits based on their own earnings, then switch to spousal benefits later if it proves beneficial. This approach can optimize the total retirement benefits for couples.

Using Fred and Wilma again as examples: Fred, who is three years older, claims benefits at his FRA of 67, while Wilma works until her own FRA of 67. Once she begins claiming benefits, Fred can then opt for spousal benefits based on her earnings history, which could be higher than his own.

However, if Wilma had claimed early, Fred would be capped at the higher of his personal benefit or 50% of Wilma’s reduced benefit due to her early retirement.

3. Ongoing Earnings Can Influence Both Spouses’ Benefits

For retirees under their FRA, Social Security applies an earnings test that deducts $1 from monthly benefits for every $2 earned over an annual limit, which is set at $23,400 for 2025. When reaching FRA, the deduction shifts to $1 for every $3 over a higher limit of $62,160.

Many married couples may not realize that if one spouse continues to work while the other collects benefits, it can lower both partners’ payouts. For example, if Wilma claims benefits while earning more than the established limits, deductions will affect her benefits and that of Fred, who is drawing benefits based on her earnings.

The good news is that any deductions are only temporary. Once the couple reaches their FRA, the earnings limit no longer applies, and withheld amounts will eventually be repaid through increased future benefits.

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