Planning for retirement can be a source of anxiety for many couples. How to plan your finances when you can’t predict how long you or your spouse will live is a source of stress and it’s never a fun topic of conversation; but with the right financial planning, you can be confident that you can keep the lifestyle you want. Full retirement age is 66 (67 for those born after 1960) and the earliest a person can start collecting from social security retirement benefits is age 62. Making the most of the benefits you do receive takes some strategizing and consulting with a retirement planner who can provide the best financial advice. Schedule an appointment with KNR Consulting to start planning for your retirement.
In recent years, people have been living longer so there is a risk of outliving their retirement savings, so it is essential for a couple to maximize social security benefits. Couples can defer drawing money from their account until the age of 70. From the age you retire till the age of 70, your future monthly payments could grow. Discussing with your spouse about how long you both expect to live is the start of the process. If one spouse has a higher income, it might make sense to defer those benefits for longer. So, what other strategies are there to maximize your social security retirement benefits for you and your spouse?
Maximize Lifetime Benefits
If you and your spouse have similar incomes and ages, it might benefit your finances more to delay both social security accounts. The longer you defer your benefits, the larger payments you will receive after you do start withdrawing. This strategy tends to work better for couples:
- With a similar life expectancy
- With similar incomes
- Who plan on working until the age of 70
- Or who have enough savings to live on until they decide to start withdrawing.
Maximize the Survivor Benefit
When one spouse dies, the other is eligible to receive your social security payment as a survivor benefit, if the amount is higher than the deceased spouse. When couples decide to withdraw from their account upon turning 62, this limits how much the surviving spouse could claim as the survivor benefit. Deferring social security retirement benefits will help the surviving spouse by providing higher payments
- This strategy works for couples with one spouse that has higher social security benefits and will expect to outlive the other spouse.
Don’t File For Different Types at Once
It’s possible for a person to be eligible for a retirement benefit and a survivor benefit, but if you file for both at once, you will lose out on one. Individuals are only allowed to claim one social security benefit. For a couple who lost one spouse, the 62-year-old surviving spouse is eligible for both their own benefits as well as the survivor benefit. However, you can only claim the higher of the two benefits. In this situation, the surviving spouse can claim their own retirement benefit until the age of 66 and then claim the survivor benefit.
A Benefit of Divorce
There aren’t many benefits to a divorce, but when it comes to retirement benefits, there is a distinct advantage of married couples. When a couple has been married for over 10 years, have been divorced for over two years, and have reached the full retirement age without filing for benefits, both people are able to claim full spousal benefits while they postpone their own benefits to let it grow. In a married relationship, only one person is able to claim a spousal benefit.
Hold Off on Remarrying
If you remarry before the age of 60, you lose the chance to claim spousal benefits. If your spouse or ex has died, you can’t claim a survivor benefit either if you remarry, unless you do after the age of 60.
The number one thing to remember when it comes to social security retirement benefits is to hold off on withdrawing from the account as long as possible unless health conditions are a factor. Planning for retirement is a struggle and it’s hard to determine what will happen in your future. For financial planning and advice, start a conversation with a financial advisor at KNR Consulting. We will work hard to ensure that you are able to live a comfortable and enjoyable retirement.