Social Security Strategies for Married Couples

The following is an adapted excerpt from my book Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less.

As with the when-to-claim decision for an unmarried person, the decision for married people depends largely on life expectancies. But in this case, each spouse’s decision depends on both spouses’ life expectancies.

When Should the High-PIA Spouse Claim Benefits?

As we discussed in the previous chapter, delaying Social Security is akin to buying an inflation-adjusted lifetime annuity—one that’s a heck of a deal for many investors because it comes with a significantly higher payout and lower credit risk than annuities you can buy in the private marketplace.

In most cases, for the spouse in a married couple who has the higher of the two primary insurance amounts, delaying Social Security is just like that, but better. In addition to an unusually high payout and unusually low credit risk, the annuity now comes with the possibility of a survivor benefit as well.

EXAMPLE: Allan and Liz are married, both age 62. Liz’s career earnings are rather low, because she spent many years out of the paid workforce doing volunteer work and caring for their children. As a result, Allan’s primary insurance amount is much larger than Liz’s. After either Allan or Liz dies, the surviving spouse will be receiving an amount equal to Allan’s benefit. (If Liz is the surviving spouse, it will be partially in the form of a widow’s benefit.) As a result, if Allan chooses to hold off on claiming his own retirement benefit, he increases not only his own benefit while he’s alive, but also Liz’s widow’s benefit in the event that he predeceases her.

In short, the decision for the higher-earning spouse includes the same considerations as for an unmarried retiree, with one major modification: the life expectancy in question is no longer just the person’s own life expectancy, but rather the joint life expectancy of the two spouses (because delaying benefits will increase the amount paid out as long as either spouse is alive).

In other words, from a breakeven perspective, for it to be advantageous for the higher-earning spouse to delay his/her retirement benefit, only one spouse needs to make it to the breakeven point. As you can imagine, this often means that it’s a very good deal for the high-PIA spouse to wait until age 70 to claim retirement benefits.

When Should the Low-PIA Spouse Claim Benefits?

For the spouse with the lower primary insurance amount, the decision of when to claim benefits works in much the same way as the decision for an unmarried person, but with one major modification: it’s somewhat less advantageous for the low-PIA spouse to delay benefits, because doing so only increases the amount the couple will receive while they’re both still alive.

For example, if we look back at Allan and Liz from above, having Liz hold off on claiming Social Security does not increase the amount Allan will receive at any point. And it only increases the amount Liz will receive while Allan is still alive as well (because once Allan dies, Liz will begin receiving her widow’s benefit).

Simple Summary

• For married couples, both spouses’ respective life expectancies should be considered in each spouse’s claiming decision.
• It is usually advantageous to have the spouse with the higher primary insurance amount delay claiming his/her retirement benefit as long as possible, because doing so increases the amount the couple will receive as long as either spouse is alive.
• For the spouse with the lower primary insurance amount, there’s less to be gained as a result of waiting to claim benefits, because doing so only increases the amount the couple will receive while they’re both alive. (And in some cases there’s nothing to be gained from waiting beyond full retirement age, because spousal benefits do not continue to increase as a result of waiting past FRA.)