What many people don’t know is that by delaying these benefits, you’re actually able to help your spouse from beyond the grave with the spousal benefit and will receive a higher payout once you begin taking withdrawals. Roughly 4% of women and 2% of men wait to claim Social Security benefits at age 70, although their benefits would be 50% higher than claiming at age 62 and 25% higher than at 67.

Of course, there is no one-size-fits-all approach in retirement — perhaps you need to take your Social Security early, or maybe you could afford to take it later in life. Regardless, the Social Security spousal benefit is something every couple should be aware of. In this article, we’ll discuss the advantages of filing for Social Security early (age 62) and later (age 70).

Filing early

There are some very good reasons why some people should file early.

If you come from a short-lived family or suffer from poor health, it may be wise to claim at age 62 (if not Social Security disability insurance before then) to enjoy your retirement for as long as you can. You may not see the other side of 70, let alone live to your “crossover” age of mid-80s to make up the difference caused by waiting until age 70 to collect, or you may simply need that money.

People who have assets in real estate or low cost-basis stock may also have no reason to wait and choose to file for benefits at age 62. The cash flow, reduced as it is, may help them remain fully invested. As for longevity risk, they may need to liquidate something someday.

Most people file either at age 62, at full retirement age (FRA), or when they retire. Those are the most obvious options. It’s simpler than studying the rules (or using software) and trying to optimize the claiming date. (FRA is 66 for boomers born in 1954 or earlier. It increases by two months per birth year thereafter, reaching 67 for those born in 1960 or later.)

Filing late

You may decide to delay retirement and Social Security until age 70, if you’re able to, in order to avoid dipping into savings until a later time and take advantage of the spousal benefit.

Employing this strategy can help maximize your family income stream while both your spouse and you are alive. If you are a man, and we often pass first, this strategy can help maximize your wife’s income stream when she’s a widow, and conserves assets for your heirs.

This benefit states that a non-working wife can receive half of her spouse’s benefit while the spouse is alive and the entire benefit when they’ve passed. If the wife was the primary earner, the husband can claim either his own earned benefit or half of her benefit, whichever is higher (if they plan to claim at full retirement age or later).

A widow or widower can inherit the benefit that a primary-earning spouse achieved by delaying benefits until age 70. The most a surviving spouse could receive from Social Security would be the late primary earner’s benefit as of full retirement age.

Steve Sass said in his 2016 “The Social Security Claiming Guide, “A husband can increase the monthly benefit his wife gets as his survivor more than 20% if he claims Social Security at 66, not 62, and 60% if he claims at 70.” (Italics added.)

By utilizing this strategy, you could be able to better serve your spouse and heirs once you’re no longer with them — think of it as helping them one last time. If you’d like to explore your Social Security benefits, start working with an experienced financial professional today!

Investment Advisory Services offered through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. Pacific Group Advisors and RWA are not affiliated. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

Not associated with or endorsed by the Social Security Administration or any other government agency. DT1007471-1120