When Should a Married Couple Avoid Putting Off Social Security Benefits? Sponsored By:Aaron Steele

When one spouse starts receiving Social Security benefits, it can have a considerable impact on the benefits of the other.

Social Security is one of those subjects that elicits strong feelings on both sides of the debate.

One party believes that delaying benefits as long as possible is the best option, while the other believes submitting at age 62 is the best option. Both arguments are valid, but neither applies to everyone, particularly couples.

When you're single, deciding when to take Social Security payments is relatively straightforward. All you have to do is make a decision based on your needs and life expectancy.

Couples, on the other hand, are faced with a far more difficult decision. So, it's frequently advisable to take a hybrid strategy. Let's get into the specifics.

Survivor Benefits

One of the main reasons couples should consider the Social Security issue is that when one spouse begins their benefits, it can directly impact the other spouse’s benefit while both are living, especially once one spouse is gone.

Let's have a look at an example to understand how this works.

Here are the monthly FRA (full retirement age) payouts for our hypothetical couple:

Spouse 1: $2,000

Spouse 2: $1,000

While both are alive, both will get their own benefits totaling $3,000 a month.

When one spouse dies, the survivor begins to get their own or spouse's benefit (whichever is greater). So the surviving spouse (whether spouse 1 or spouse 2) would receive $2,000 in this case since it’s the higher of the two benefits.

 

However, let's suppose that spouse 1 (the higher earner) chooses to postpone her benefits until she is 70 years old, three years past her FRA. That would raise her benefit to $2,480, meaning the surviving spouse would receive extra money as well.

If spouse 2 chose to postpone benefits until age 70, the total benefits they received would grow while both were alive. However, since it’s the lower benefit, it would disappear when one of the spouses died.

That implies that if the higher-earning spouse decides to collect benefits, it will significantly impact the pair while they're both alive and after one of them has died.

When to File?

And we're back to the subject of when each spouse should apply for benefits.

Social Security is a compromise for every one of us. Should we forego current benefits in exchange for bigger future ones? And if we live until the point where we "break-even," we'll have more than made up for the lost benefits.

 

However, since the benefits of the better-earning spouse endure over both spouses' lifetimes, the chances of at least one of them exceeding the break-even threshold are bigger than only one life expectancy.

That makes it more enticing for the higher-earning spouse to postpone benefits for as long as possible. In contrast, the lower-earning spouse takes benefits as soon as possible since, from a break-even aspect, it would only make sense for both spouses to postpone benefits if both lived well into their eighties and longer.

Further Thoughts

 

As you can expect, this might not be suitable for everyone. Everyone's circumstance is unique, and you'll need to do a lot of research to find the best option for you.

 

Many people's retirement plans include a significant amount of Social Security, and deciding when they’ll submit will have long-term consequences.

Contact Information:
Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

Disclosure:
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