How Can We Maximize Our Social Security Payments?
Q: I’m 66, still working, and have not started benefits. If I start benefits now I would get $1,863 per month. My wife turns 64 this year and would like to start benefits soon. She would qualify for about $827 based on her earnings at age 66. What would you recommend as to timing to maximize our payments?
A: Both you and your spouse would receive higher benefits, and substantially more in lifetime Social Security income if you can continue working a few more years before starting benefits. Once your wife reaches her full retirement age, you can "file and suspend" an application for your own benefit. This will allow your wife to apply for a spousal benefit that would be one-half of the benefit due to you and higher than what she would receive based on her own record.
If you work until age 70, your monthly benefit will continue to increase to $2,619 due to delayed retirement work credits. Because your wife is also delaying her own retirement benefit, it will also grow. By age 70, your wife can switch to a retirement benefit based on her own account if it’s higher than her spousal benefit.
The added years of earnings can also boost your respective retirement benefits if they are your high earning years. Social Security uses your highest 35 years of earnings to determine your benefits so extra years at your highest earnings will raise your Social Security payments. This is an important consideration for survivors' benefits, if you die before your wife. She would receive higher widow's benefits.
What Not to Do: Your wife should NOT start benefits at age 64 unless you are in dire straits. Social Security would reduce her benefits, either spousal or retirement benefits, based on her own account and she would receive lower benefits for the rest of her life.
The Social Security website has a wealth of retirement planning information and tools to help you plan at www.SocialSecurity.gov.