Are you and your spouse getting ready to retire soon? Congratulations on this exciting life change!

As you start planning for retirement, an important question that comes up is, “How is social security calculated for married couples?”. It’s not just about understanding each other’s benefits; it also involves careful research and number crunching to determine the best claiming strategies for you and your spouse.

Don’t worry! Social Security can be complex, but it doesn’t have to be. We’re here to help provide more details at what factors are taken into consideration when determining social security payments, so you can make informed decisions as you plan your future together.

How Social Security is calculated for married couples.

Married couples retiring together can benefit from Social Security retirement benefits, with the amount being calculated following specific rules set by the Social Security Administration.

Being married has no impact on a spouse’s Social Security benefit. Each spouse is eligible for a Social Security retirement benefit based on their own individual work record and earnings history. Assuming both you and your spouse each qualify for retirement benefits, you will each receive separate benefits and the amounts do not affect each other when claiming benefits individually.  

However, some situations are not that simple. The Social Security Administration offers a few additional claiming strategies to spouses that may benefit them more than claiming their individual benefits. It’s important for couples to research social security rules and claiming strategies carefully and make sure they’re making decisions that will maximize their social security income based on their situation. 

How to maximize your Social Security benefits as a married couple.

As a married couple, there are several ways to maximize your Social Security benefits. It’s important to review your options carefully as the strategy you choose should be based on your overall financial situation.

Worker Benefits

Each spouse could claim their own benefit, which will be calculated on their lifetime earnings records. It’s important to determine your benefit at full retirement age. Depending on your overall financial situation, it may benefit one or both spouses to take Social Security before full retirement age or delay collecting until they reach their full retirement age or later in order to maximize monthly social security payments. 

Spousal Benefits

However, suppose one spouse earns significantly more than the other. In that case, the spouse who makes less may have the option to claim a spousal benefit which could give them up to 50% of the higher-earning spouse’s benefit. The social security retirement spousal benefit is calculated using formulas that consider both spouses’ earnings and age relative to when they wish to begin collecting social security, and the higher-earning spouse must have filed for benefits.

Survivor Benefits

Additionally, an individual may receive social security benefits based on the work record of a spouse who is deceased. This can only be done if the deceased’s benefit is higher than the individual’s own benefit amount at the time of the spouse’s passing.

Utilizing one of these methods may help you and/or your spouse benefit from Social Security payments for many years to come.

Can a Divorced Person Collect Social Security Based on an Ex-Spouse’s Benefit?

If you are divorced, you may be eligible to receive Social Security Divorced Spousal Benefits if you meet certain criteria.

To be eligible for this benefit program, you must meet the following requirements:

• Be at least 62 years old.
• Not currently married.
• Be divorced from a person who receives, or is eligible to receive, Social Security retirement or disability benefits.
• Have been married to that person for at least 10 years before the date the divorce became final.
• Not be entitled an equal or higher retirement or disability benefits.

The benefit you’re entitled to receive based on your own work must be less than the benefit based on your ex-spouse. The benefit based on the former spouse’s record is 50% of the former spouse’s primary insurance amount (PIA), reduced if you start prior to your own full retirement age. 

The benefit amount you receive has no effect on your ex-spouse and/or his or her current spouse’s benefits.

Tips for couples nearing retirement age who are looking to maximize their Social Security benefits.

For couples nearing retirement age, anticipating Social Security benefits can be both exciting and stressful. It’s important to understand how Social Security benefits are calculated and when you should claim your benefits based on your overall financial situation. Fortunately, there are strategies available to help maximize the potential benefits you receive, but it’s important to plan ahead.

As you approach retirement, it’s important to take a holistic approach to your retirement income needs which will take into account all aspects of your life and goals, including investments, taxes, insurance, retirement income, social security, and estate planning and how they work together.

Consider working with a financial advisor who is knowledgeable in holistic planning – including social security –  and can help you optimize your assets to collectively work towards your goals. 

If you have questions about your specific situation, our team at Intelliplan Financial would be happy to help. We offer complimentary consultations to help answer all of your questions and get you started on the path to a comfortable retirement. Schedule your complimentary introductory meeting here.

Disclosure: Financial Planning and Advisory Services are offered through Prosperity Capital Advisors (“PCA”), an SEC-registered investment adviser.  Registration as an investment adviser does not imply a certain level of skill or training. Intelliplan Financial and PCA are separate, non-affiliated entities. PCA does not provide tax or legal advice. Insurance services offered through Intelliplan Financial are not affiliated with PCA.