Navigating Social Security as a Couple

Figuring out when you and your spouse will each take Social Security retirement benefits can be a complex decision with unintended consequences. It’s important to understand how each spouse’s claiming decisions can affect you both. That’s why it’s important to think through your claiming strategies before either of you are ready to retire.

Here are three questions that can help you make the best decisions for your Social Security benefits individually and as a couple:

Are Either of You Eligible for a Spousal Benefit?

For couples with big differences in their lifetime income, spousal benefits can be an important part of your claiming strategies. 

If one spouse was the sole breadwinner while the other spouse did not work outside the home, the spousal benefit is an easy calculation. The non-earning spouse is eligible for a spousal benefit equal to 50% of the earner’s benefit. So if the breadwinner is eligible for a $2,400 benefit as of full retirement age, the homemaking spouse can expect a $1,200 spousal benefit.

However, if the non-breadwinning spouse did work enough to qualify for retirement benefits on their own record, the calculation for spousal benefits is a little different:

50% of Higher Earner’s Benefit – Lower Earner’s Benefit = Spousal Benefit

This spousal benefit is then added to the lower earner’s benefit. For instance, let’s say the lower earning spouse is eligible for a $1,000 benefit on their own work record, while their breadwinner spouse is eligible for a $2,400 benefit. The spousal benefit is then equal to $200.

(50% of $2,400) – $1,000 = $200

You’ll notice that the lower earner is still eligible for a total benefit equal to half of the higher earner’s benefit. ($1,000 of their own retirement benefit plus $200 of spousal benefit). 

However, understanding exactly how much the spousal benefit will be can help you determine when to take benefits, since both the retirement insurance benefit and the spousal benefit are subject to reductions if you take benefits prior to full retirement age, while just the retirement benefit can increase if you delay past full retirement age.

Starting with an understanding of how much spousal benefit the lower earner in your marriage is entitled to as of full retirement age can help you better understand how these benefits will be affected by early or late claiming.

How Much Can You Expect in Survivor Benefits?

This is one of the most vital questions spouses need to think about for their Social Security benefits. The amount of money the surviving spouse receives will be either their own monthly benefit, or the monthly benefit of the deceased, whichever is greater.

For instance, Felicity is eligible for a $2,500 benefit as of her full retirement age. Her spouse Louis is eligible for a $1,250 benefit at full retirement age. 

If both spouses take their benefits at age 65, that would reduce Felicity’s benefit to $2,166 and Louis’s to $1,083. No matter which spouse dies first, the survivor benefit in this case will be $2,183, because it is the greater of the two monthly benefits.

But if both spouses wait to take benefits until age 70, that increases their future survivor benefits as well as their monthly retirement benefits. Felicity’s benefit will be $3,100 and Louis’s will be $1,550 as of age 70. That means no matter who predeceases whom, the survivor benefit for either spouse will be $3,100. 

Looking at your retirement benefits with an eye to how far they will go as a survivor benefit can help you make the best choices for the future. 

How Will Taxes Affect Your Benefits?

Social Security benefits are taxable, depending on what’s colloquially known as your provisional income, but which the Social Security Administration calls your combined income. The formula for calculating your combined income is:

  • One-half of your Social Security benefits, plus
  • All of your other income, including tax-exempt interest. (Tax free distributions from your Roth IRA are not included)

The combined income is then compared to an upper and lower base amount to determine how much of your Social Security income may be taxable. For married couples, the lower base amount is $32,000 and the upper base amount is $44,000. (Please note that these base amounts are not tied to inflation and have not changed since 1984.)

If your combined income is less than $32,000, you will owe no taxes on your benefits. If it falls between the base amounts, you will owe taxes on up to 50% of your benefits. If it is above $44,000, you will owe taxes on up to 85% of your benefits. 

The portion of your benefits that are taxable will be taxed at your marginal tax rate. Understanding and calculating how taxes may affect your benefits can help you make clearer decisions about claiming Social Security and taking distributions from your retirement accounts. 

That’s because pulling additional money from your retirement accounts could trigger a tax consequence for your Social Security benefits. If your combined income is between the base amounts, every additional dollar you take from a retirement account will add $0.50 of your Social Security benefits to your taxable income. If your combined income is above $44,000, every additional dollar in retirement account distributions will add $0.85 of Social Security benefits to taxable income.

Having a plan in place for your retirement account distributions and your Social Security benefit timing can help you make the most tax efficient decisions you can as a couple.

Planning Ahead as a Couple

Knowing which questions to ask as you approach retirement and Social Security claiming can make a big difference. 

If you would like more information about how to navigate Social Security as a couple, please leave a comment below. You can also join Devin’s FREE Facebook members group. It’s very active and has some really smart people who love to answer any questions you may have about Social Security.

 And don’t leave without getting your FREE copy of the Ultimate Social Security Cheat Sheet. This has all the numbers, limits, and rules that apply to many situations and it’s all condensed down to just one page. Click HERE to get yours today.

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Jim Cleaveland
Jim Cleaveland
2 years ago

At age 62 (June 2023) my wife started receiving her SS benefit that had a 30% age reduction plus the maximum WEP reduction of $498. I plan to apply for my SS benefit at my FRA which will be Jan 2026. Will her adjusted spousal benefit be calculated with an age reduction (35%) plus her original WEP reduction of $498 or increased to whatever the maximum 2026 WEP reduction is.

2 years ago

My question is if my spouse takes her SS at age 62 then I file for mine at age 64 will she then get 1/2 off mine if it is greater than hers.

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