Should you and your spouse delay Social Security? – The crazy fool

Social security serves as a lifeline for millions of seniors today. Even if you have saved well for retirement, it is highly likely that these benefits will improve your lifestyle, either by giving you more money for your leisure activities or by allowing you to travel more during your golden years. . That's why it pays to make the most of these benefits. A good way to do this is to deposit them after you reach the retirement age.

Although your social security benefits are calculated based on what you earned during your working years, the age at which you first report them will also determine the amount you will be collecting each month through the program. If you are producing at your specific retirement age – which, depending on your year of birth, is 66, 67 or somewhere in between – you will get the exact monthly benefit for which your earnings record makes you eligible. Apply before retirement age, and your benefits will decrease by a certain percentage for each month you claim them earlier.

But there is another option with regard to the deposit of benefits and this can be very lucrative: you can defer benefits beyond the age of retirement and increase them by 8% per year until they reach 70 years of age. falls short of. This means that if you plan to retire at the age of 67, waiting until the age of 70 to qualify for benefits will provide you with an additional 24% income from social Security. Not too bad.

But what happens if you are married and your wife and you are entitled to social security? Is it wise for both of you to delay benefits? Or is there a better solution to consider?

Synchronize with your spouse

In some cases, it is actually advantageous for you and your wife to delay Social Security as much as possible. For example, if and your spouse saves little on his personal savings, earns about the same amount during his working years and expects a long life, jointly delaying benefits after full retirement age could generate a larger ongoing income stream at your fingertips during your golden years.

But this is not the only movement at play here. If you and your spouse each have a work record, you can stagger your claims to get benefits at different times. You can, for example, ask at the bottom of your cashier to receive social security income at the age of full retirement, while the high-earner increases his benefits by waiting up to 70 years. Or, you could do it on the contrary, make sure that high earners receive benefits sooner and increase the profits of low incomes in a higher amount.

It should also be kept in mind that if you have never worked, but are entitled to spousal benefits through Social Security, you can not claim them until your spouse has started to touch. benefits. Now, say that you are the same age as your spouse and that your spouse intends to file a return at age 70 to get the maximum monthly benefit to which he or she is entitled. In this case, you will effectively be obliged to delay your own benefits, even if you would otherwise be entitled to claim them earlier.

Now, if you are entitled to benefits based on your own work record but your spouse earns a lot more than yours, another option to consider is to deposit your own benefits at retirement age and leave your spouse's benefits increase by making it file at age 70. Once your spouse has deposited, if half of his benefits at retirement age exceed your benefits, your monthly payments will be increased to make up the difference. In other words, your monthly income from Social Security will increase even without waiting for you beyond retirement age.

One last thing to keep in mind: survivor benefits. If your spouse receives a larger benefit than you, once it is enacted, your benefits will be replaced by survivor benefits equal to what your spouse was receiving. Therefore, if you are married and expect your spouse to die well before you, you could have this spouse wait for benefits as long as possible if his or her monthly payments far exceed yours. In this case, you could claim your own benefits sooner and then resort to a larger monthly payment for life, in the form of higher survivor benefits.

By delaying your Social Security benefits, you will have each month of a larger amount of money in your pocket. However, delaying benefits for you and your spouse will depend on your respective earnings records and life expectancy, as well as your collective needs. In both cases, discuss your choices and develop different scenarios to get an idea of ​​what might be best for you.