Social Security Spousal Benefits: What Married Women Should Know

A question making the rounds among retirement planners highlights a strategy many married women — and men — overlook: whether a spouse can claim a reduced spousal Social Security benefit early and later switch to their own, potentially larger, retirement benefit at age 70.

The short answer is complicated by the Social Security Administration's "deemed filing" rules, which were significantly tightened under the Bipartisan Budget Act of 2015. Under current law, when you file for any Social Security benefit — whether your own retirement benefit or a spousal benefit — you are generally deemed to have filed for all benefits you are eligible for at that time. That means the old strategy of filing only for spousal benefits while letting your own benefit grow is no longer available to most workers born after January 1, 1954.

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However, there is an important exception: if one spouse has not yet claimed their own retirement benefit, the other spouse cannot file for spousal benefits at all. The spousal benefit only becomes available once the primary earner has filed. This sequencing matters enormously for couples trying to maximize lifetime household income from Social Security.

Financial advisers consistently urge women in particular to pay close attention to these rules, since women on average live longer than men and are therefore more likely to rely on Social Security income in later years. Delaying your own benefit to age 70 — if you are the higher earner — can lock in the maximum possible monthly payment, which is roughly 77% more than claiming at 62.

The nuances of spousal and survivor benefit rules make Social Security one of the most complex decisions in retirement planning, and mistakes can cost tens of thousands of dollars over a lifetime. Continue reading at MarketWatch.com