Written By: Sarah Caine

In my last blog post, I told you when you can start collecting Social Security benefits, but when should you?  Many people think it’s best to begin collecting Social Security benefits as soon as possible – I’ve heard more than one person say, “my father died young; I’m going to take my benefits while I can.”   And while collecting early is sometimes the best choice, it’s often better to delay claiming benefits until your Full Retirement Age or beyond.

When you should start collecting depends on a lot of different factors, including:

  • Your marital status
  • Your ability to claim on someone else’s benefit in addition to your own (whether it is a current spouse, divorced spouse or deceased spouse)
  • Your overall health and life expectancy
  • The age difference between spouses
  • In a multiple benefit situation, the dollar amount of the difference between benefits

Also, there are some Social Security collection strategies that you might be able to use to maximize the benefit you receive, either as an individual or as a family.  These strategies differ with the composition of your family.

If you’re single, your decision is pretty straightforward:  it’s mostly based on your health and life expectancy.  If you live exactly until your actuarial life expectancy, you’ll receive approximately the same amount of money from Social Security regardless of when you file for benefits.  So if you think you’ll die young, file early.  And if you think there’s a good chance you’ll live a long time, or you’re really worried about outliving your money, and you want to lock in a higher benefit, delay.

If you’re married, it gets a lot more complicated, because you can each claim on your own record and/ or on your spouse’s record.  You should look at Social Security with a goal of maximizing family benefits.  Here are some tools you can use:

  • Spousal Benefit:  this is 50% of the worker’s PIA if you start collecting at your FRA, reduced if you collect early.  Important note:  there are not delayed retirement credits here; the maximum benefit you get on a living spouse is what you get at FRA.
  • File & Suspend:  If you are at or over FRA, you can file for benefits on your earnings record and immediately request that benefit payments be suspended.  Why?  To make your spouse eligible to receive spousal benefits on your record while allowing your benefit to accrue delayed retirement credits.
  • Claim Some Now; Claim More Later:  If your spouse if currently collecting Social Security benefits and you are at or over FRA, you can file a Restricted Application for Spousal Benefits Only.  This enables you to collect a benefit of 50% of your spouse’s PIA while allowing your benefit to continue to accrue delayed retirement credits.
  • Combined Strategies:  The higher earner Files and Suspends.  The lower earner files a Restricted Application for Spousal Benefits Only.  The result?  Both spouses earn delayed retirement credits; but at the same time, the family receives a monthly benefit of 50% of the higher earner’s PIA until age 70.  Please note that both spouses must be at or over FRA for this strategy to work.

If you’re divorced, but you were married to the same person for 10 years or more and you are currently unmarried, you can claim on your own record and/ or your ex-spouse’s record.  Here’s your strategy:  If you’re at or over FRA, you may choose to receive only the divorced spouse’s benefits now and delay receiving retirement benefits on your record.  This enables you to accrue delayed retirement credits while receiving some money now.

If you’re a widow/ widower, and you did not remarry before age 60 (or if you remarried before age 60, but the marriage ended), you can claim on your own record and/ or your deceased spouse’s record.  Your strategy is:  you may file for a reduced widow’s benefit at age 62 (or earlier in some special circumstances), and then at FRA or at age 70, you could switch to your own benefit which has grown.

An important note if you’re divorced or widowed:  if you log on to the Social Security Administration’s website, you will not see the benefits to which you are entitled on your previous spouse’s record.  You will need to visit a Social Security office to get that information.

If you’re married to a same-sex partner, and you live in a state that recognizes same-sex marriages, see the section for “if you’re married.”

It’s a lot to think about.  If you’re a JPP client, call us, we can help.  If you’re not, make an appointment at your local Social Security office to get more information.

Written By: Sarah Caine