Delaying Social Security in this situation is always a huge mistake

Making an informed choice about when to claim Social Security benefits is crucial to a secure retirement. This is because the age at which you receive your first check will impact the monthly income you receive from the Social Security Administration.

In many cases, the advice is to wait and claim benefits as long as you can — even into your 70s. However, there is one circumstance where putting it off for so long absolutely never makes sense.

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In this situation, do not delay in applying for Social Security benefits

If you’re claiming spousal Social Security benefits on your spouse’s work record, you shouldn’t delay applying until age 70. Unlike other retirees, you don’t need to do a break-even calculation to see if it’s better to defer. benefits. It’s a no-brainer that the delay makes no sense to you.

There is a very simple reason for this. When you claim benefits based on your own work record, you can earn delayed retirement credits if you wait to start your checks until after your full retirement age. These delayed pension credits increase your benefit amount by two-thirds of 1% per month.

If you have an FRA of 67, deferring to 70 can thus result in a 24% increase in benefits. It’s a big leap up. Studies have also shown that latecomers are more likely to receive more lifetime benefits.

However, when you receive spousal benefits, it’s a very different story. The spousal benefit can be equal to up to 50% of the higher earning spouse’s primary sum insured or the standard benefit. It can work below this amount if you claim your benefits before full retirement age, as you will face early filing penalties. But it cannot exceed this amount.

If you delay claiming spousal benefits after FRA, your checks don’t get bigger. The most you can get, however, is 50% of your spouse’s standard benefit. Because you won’t see any extra money as a result of deferring Social Security benefits over age 70, there is absolutely no reason to wait. You will be giving up checks that should be yours for no financial gain.

Claiming Social Security is much more complicated as a married couple

As you can see, it’s very important to know the rules about how Social Security spousal benefits work if you’re married. Otherwise, you could make a mistake and delay with the hope of increasing your benefit, only to lose income.

This is just one of the many complexities associated with claiming Social Security when you’re married. Many other special rules also apply, which can influence the optimal age for both higher- and lower-earning spouses to decide when a claim for benefits makes sense.

To make sure you maximize the Social Security income you receive as a couple in retirement, it’s important to take the time to research your options and coordinate a claiming strategy with your spouse that makes sense. This can pay off as you bring in more Social Security income to help you have a secure retirement.