• James Robinson CFP

Strategies to Maximize SSA Payments

Social Security Strategies to Maximize Benefits for Married Couples

Americans are living longer, healthier lives. They also tend to work longer to help maintain a level of living comparable to their ‘Pre-Retirement Lifestyle.’ Many refuse to live on reduced pension income and Social Security. Many military veterans are in this particular situation as they did not serve 20 years to receive a military pension.

Unfortunately, when age 62 arrives, many people simply decide to file a claim, triggering a reduced monthly Social Security benefit for the rest of their lives. Still, others link the claiming decision to when they stop working, without understanding that retiring does not necessarily mean that benefits have to begin.

Sadly, many Americans facing retirement spend more time planning their vacations that year instead of their ‘Exit Strategy from the American Workforce.’ Married couples should carefully consider their payout choices before claiming Social Security benefits because this decision can impact their long-term financial security. Couples should keep in mind that the decision to receive reduced benefits at an early age or to wait until full retirement age (or later) to receive larger benefits must be based on a person’s needs and situation.

The good news is that both spouses can receive Social Security retirement benefits even if one of the spouses worked outside the home. And, spouses who work and contribute to the Social Security system can claim retirement benefits in their own right, based on their own earnings history. These working spouses who are eligible for both their own retirement benefits and for benefits as a spouse will receive the higher of the two amounts. Don’t worry, Social Security calculates these two amounts and pays the one that’s greater.


Claiming early may be appropriate for individuals who are in poor health, are unable to continue working, or do not have adequate financial resources. A person’s risk tolerance, marital status, health, expected longevity, amount of assets, and ability to continue working must be considered when determining the optimal time to claim benefits.

Same-Sex Marriages

The Social Security Administration recognize same-sex couples’ marriages in all states, and some non-marital legal relationships (such as some civil unions and domestic partnerships), for purposes of determining entitlement to Social Security benefits, Medicare entitlement, and eligibility and payment amount for Supplemental Security Income (SSI). We also recognize same-sex marriages and some non-marital legal relationships established in foreign jurisdictions for purposes of determining entitlement to Social Security benefits,

Medicare entitlement, and Supplemental Security IncomeI.

Social Security Income Strategies for Couples

The Social Security Office of Retirement and Disability Policy offers this advice, “When to claim Social Security retirement benefits is one of the most important financial decisions an individual can make. Social Security provides monthly benefits to eligible retired workers and their families. As retirement nears, an individual must decide at which age to start receiving benefits. Benefits may be claimed before, at, or after full retirement age (FRA), which varies depending on year of birth. Benefits claimed before reaching FRA are permanently reduced, but they are collected over a longer period. If claiming is deferred until after FRA, monthly benefit amounts are permanently increased, but they are collected over a shorter period. The earliest possible age to claim retirement benefits is 62. The increase for deferred claiming stops accruing at age 70. Social Security benefits continue if a person lives and are inflation-protected through an annual cost-of-living adjustment. An adequate stream of inflation-protected income can guard against poverty in old age.

In this article, we will not get down in the weeds…instead, we wish to provide pathways that will educate and empower you to make an informed Social Security Strategy decision.

Decision Calculators

Here are four web-based decision tools that are provided by government agencies, academic and nonprofit organizations. The tools are SSA's Retirement Estimator, CFPB's Planning for Retirement, CRR at Boston College's Target Your Retirement and AARP's Social Security Benefits Calculator.

Retirement Estimator – Social Security Administration (SSA): The Retirement Estimator is one of 11 online calculators available from SSA that address various aspects of retirement planning. It uses an individual's actual earnings history to estimate the future value of his or her Social Security retirement benefits under various claiming-age scenarios. A powerful user-friendly tool.

Planning for Retirement via the Consumer Financial Protection Bureau: Planning for Retirement explores retirement options in three steps. The first step presents rough benefit estimates for each claiming age from 62 through 70 based on the SSA calculation formulas. In the second step, the user answers five summary questions covering marital status and expected retirement age, spending habits, income sources, and longevity. The tool provides customized information based on the answers chosen. In the final step, the user selects the age at which he or she plans to claim Social Security retirement benefits. The tool provides summary information on whether the chosen age increases or decreases the benefit amount relative to claiming at FRA.

Target Your Retirement – Center for Retirement Research at Boston College: Target Your Retirement calculates a target monthly retirement income and estimates the amounts the user will receive from Social Security benefits, retirement savings, and pensions. Users can then adjust three important “levers”—controlling spending, working longer, and either downsizing or getting a reverse mortgage on their house—to assess how each strategy helps them to meet their monthly retirement income target.

Social Security Benefits Calculator - AARP: In four steps, this calculator shows users their estimated Social Security monthly benefit at each claiming age from 62 through 70, shows them how to maximize their benefits, and summarizes what the numbers mean. The tool is designed to help users figure out how much retirement income they will receive at different Social Security claiming ages but considers broader contexts such as their marital status, whether their expenses will be covered, and what happens to their benefit if they keep working.

Note: Web URLs and Addresses do change. That is a fact of life. If the link does not work. Go to the home page of the Decision Calculator. Enter the title or keywords in their ‘Search’ box.

Key Points – Important Reminders on Spousal Social Security Benefits

  • It’s important to note that there is no benefit to waiting to claim a spousal benefit beyond a spouse’s full retirement age. Unlike a worker’s retirement benefits—which receive delayed retirement credits—spousal benefits do not continue growing past the spouse’s full retirement age.

  • If a spouse elects to receive a spousal benefit before his or her full retirement age, the level of benefits is permanently reduced (as it would be if a person filed for his or her own benefits early). The earliest age at which a spouse can receive spousal retirement benefits is at age 62. But remember, a person can file for a spousal benefit only if the other spouse has already filed for retirement benefits.

  • When both spouses have worked, each is entitled to a retirement benefit based on their own work record. However, if one spouse has earned less than the other and the spousal benefit would be higher than his or her own benefit, the spouse will receive the spousal benefit.

  • Married couples need to be aware of what’s known as the ‘Deeming Provisions.’ This applies to individuals who turn age 62 on or after January 1, 2016, thanks to the Bipartisan Budget Act of 2015. Whenever anyone applies for either their own retirement benefit or a spousal benefit…at any age, they are automatically deemed to be applying for the highest benefit for which they are eligible. In other words, a person who applies for a spousal benefit is automatically deemed to have filed for his or her own retirement benefit as well and will receive that benefit if it’s higher.

  • The deemed filing rules do not apply to surviving spouses. A surviving spouse can decide whether to collect a survivor benefit or retirement benefit first and then later switch to the other benefit if it would be greater. The deeming provisions effectively prevent individuals from first claiming a lower spousal benefit while letting their own benefit earn delayed retirement credits.

  • File and Suspend: It is simply remarkable that rumors persist that the ‘File and Suspend’ strategy is still available for couples who both qualify for Social Security. Many married couples used the file and suspend loophole. What was the loophole? Well…as you recall, retirement benefits grow for each month you delay claiming, between full retirement age (currently 66) and 70. A loophole allowed a worker at full retirement age or older to apply for retirement benefits and then immediately suspend payment of those retirement benefits, which allowed a spousal benefit to be paid to his or her spouse while the worker was not collecting retirement benefits. The worker would then restart his or her retirement benefits later, for example at age 70, with an increase for every month retirement benefits were suspended.

  • 'Restricted Application Strategy: Individuals who reached age 62 by the end of 2015 were “grandfathered in” for the 'Restricted Application Strategy ‘and can still use the restricted application strategy. In other words, these individuals still have the option of filing a restricted application at FRA. And, anyone who has already filed a restricted application and has been receiving benefits can continue using this strategy. The restricted application strategy essentially allowed a person filing the restricted application to receive two benefits from Social Security: a spousal benefit first and then his or her higher personal retirement benefit later. This was also determined to be an unintended loophole in the Social Security rules and was eliminated for new filers with the 2015 Bipartisan Budget Act.

  • The Bipartisan Budget Act of 2015 made a number of changes to several popular Social Security claiming strategies that beneficiaries had been using for years. Most notable are the elimination of the file and suspend strategy and the elimination of filing a restricted application for benefits. And NO! There is not a military exception or exemption.

Spouses with No Earnings or Lower Earning Records

Couples have a bit more flexibility when the lower-earning spouse qualifies for even a small benefit based on his or her own record. One approach is for the lower earner to claim his or her own benefit early to bring some income into the household while the other spouse delays their payments. The higher earner might then wait to apply for benefits until the low earner reaches full retirement age and can claim an unreduced spousal benefit. Not quite the benefit as it would have been under the File and Suspend and the 'Restricted Application Strategy…but it works.

Use Common Sense

Married couples might fill the income gap between retiring and claiming benefits by continuing to work, using other assets, obtaining a reverse mortgage, or tapping into a life insurance policy’s cash values.

A Word on Survivor Benefits

  • A decision to make an early Social Security retirement benefit claim will permanently reduce both the ‘Worker’s’ lifetime benefit and the surviving spouse’s survivor benefit. Delaying Social Security not only increases a person’s own benefit but will also increase the benefit that a surviving spouse will receive.

  • Disabled children of any age can receive survivor benefits for the remainder of their lives if the disability started before age 22.

  • Survivors should file applications for benefits promptly after a worker’s death because benefits will only be paid retroactively for up to six months. Therefore, survivors will benefit from filing claims as soon as possible once a worker dies. A delayed claim could result in lost survivor benefits.

Spousal Benefits for Divorced Individuals

  1. To be entitled to spousal benefits based on an ex-spouse’s work record, a divorced spouse must:

  2. have been married to the former spouse for at least ten years,

  3. be unmarried

  4. be at least 62 years old and

  5. not be eligible for a higher benefit based on his or her own work record

Surviving Spouse must also meet certain length-of-marriage requirements. A surviving spouse can:

  • qualify for survivor benefits if he or she was married to the deceased worker for at least nine months before the worker died. However, the nine-month marriage requirement can be waived in certain cases.

Example: if surviving spouse is the mother or father of the worker’s biological child, the worker’s death was accidental, or the worker died in the line of duty, among other circumstances.

Amount of the Spousal Benefit

The amount of a divorced individual’s benefit is the same as a spouse’s benefit. In other words, divorced individuals can receive a spousal benefit equal to 50 percent of an ex-spouse’s full retirement benefit, if they start receiving benefits at their full retirement age

A person can still qualify for spousal benefits based on an ex-spouse’s record, even if the former spouse has remarried. And, the amount of spousal benefits that a divorced person receives does not affect the amount of benefits that an ex-spouse or the ex-spouse’s current spouse may receive.

Special Eligibility Rule for Divorced Spousal Benefits

We discussed the fact that to be eligible for spousal benefits, the other spouse must have claimed his or her benefit. However, the rules differ somewhat for divorced individuals. In this case, even if an ex-spouse has not yet applied for retirement benefits, the other person can still receive benefits based on the ex-spouse’s record if both of the following criteria are met:

  • They have been divorced for at least two years.

  • The ex-spouse qualifies for benefits (i.e., the ex-spouse is at least 62 years old and has the required number of Social Security credits to claim benefits).

Taxation of Social Security Benefits

Today, the Social Security benefits of more than one-third of recipients age 65 and older are affected by taxation.

Currently, benefit recipients fall into one of three categories for income tax purposes:

  • For most recipients, retirement benefits remain tax-free.

  • For some recipients, up to 50 percent of benefits are taxed.

  • For the most affluent retirees, up to 85 percent of Social Security retirement benefits are considered taxable income.

Prior to 1984, Social Security benefits were excluded from taxation. Today, from 50 to 85 percent of Social Security income can be subject to taxation depending on two income thresholds. For taxpayers with incomes between $25,000 and $34,000 (individual) or $32,000 and $44,000 (filing jointly), up to 50 percent of Social Security benefits may be taxable. For individuals with incomes above $34,000 or couples filing jointly with incomes above $44,000, up to 85 percent of benefits may be taxable. To quickly determine whether a portion of benefits is taxable, taxpayers should take their adjusted gross income, and add any nontaxable interest, plus one - half of Social Security income. If the amount is over the thresholds shown, then a portion of benefits are taxable.

Whether benefits will be taxable depends on a person’s income tax filing status—single or married filing jointly—and the amount of his or her income. Individuals whose income exceeds certain threshold limits may find that part of their Social Security retirement benefits will be taxed.

State Taxation of Social Security Benefits

It’s also important to consider how state taxes may affect Social Security benefits. The states treat Social Security benefits as follows:

  1. Thirty states and the District of Columbia exempt Social Security benefits from state income tax.

  2. Seven states (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) do not tax earned income and do not tax Social Security benefits.

  3. Seven states tax all or part of Social Security benefits but in a different manner than the federal government (Colorado, Connecticut, Kansas, Missouri, Montana, Nebraska, and Utah).

  4. Six states follow the federal government in their tax treatment of Social Security benefits (Minnesota, New Mexico, North Dakota, Rhode Island, Vermont, and West Virginia).

  5. Up to 50 or 85 percent of a person’s Social Security retirement benefits may be taxable if his or her income exceeds certain threshold levels.

  6. Social Security retirement benefits may also be subject to state income tax, depending on the state.

For those who live in states where Social Security benefits are subject to both state and federal taxes, the total income tax bill can be significant.

Other Important Factors That Impact Your Decison

  • The Windfall Elimination Provision may reduce but not eliminate the Social Security benefit of individuals who have also worked in jobs that were not subject to Social Security tax withholding and who will receive a pension from such employment.

  • The Government Pension Offset may reduce or eliminate the Social Security benefit that a spouse or survivor is eligible to receive based on the Social Security record of his or her spouse.

  • Retirees can revoke a benefit claim and stop Social Security retirement benefits if they act within one year after first claiming benefits.

  • Individuals who have reached full retirement age but aren’t yet age 70 can request that current and future benefit payments be suspended, in which case they will start automatically the month that the person reaches age 70.


Planning can help ensure that the Military Veteran and civilian spouses have a secure and comfortable retirement. Social Security is a crucial part of retirement security. Deciding when to start benefits can be complicated. We hope the information in this series has provided you with helpful information to make an informed Social Security strategy decision.

References and Resources

  • Married Couples & Social Security | AARP |https://www.aarp.org/content/dam/aarp/work/social_security/2011-10/Social-Security-and-Marriage.pdf

  • Same-Sex Couples | Social Security Administration |https://www.ssa.gov/people/same-sexcouples/

  • Social Security Benefits Planner |https://www.ssa.gov/planners/retire/claiming.html

  • A Comparison of Free Online Tools for Individuals Deciding When to Claim Social Security Benefits |The Social Security Office of Retirement and Disability Policy |https://www.ssa.gov/policy/docs/rsnotes/rsn2016-03.html

  • TAXES TAKE A GROWING PERCENTAGE OF SOCIAL SECURITY BENEFITS | The Senior Citizens League |https://seniorsleague.org/taxes-take-growing-percentage-social-security-benefits/

  • 2018 Social Security Changes |https://www.ssa.gov/news/press/factsheets/colafacts2018.pdf

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