To maximize Social Security benefits, married couples may want to take advantage of the popular "claim twice" strategy.

If both spouses are at full retirement age and have some cash flow needs but not enough for both to claim full benefits, then one spouse can collect 100% of their benefit at that time, while the other collects "spousal benefits" on that same account.

In such cases, the spouse with the lower benefits typically takes their actual benefit earlier, and the other person would file a restricted application for the spousal benefit, says Steve Williams, vice president, national head of financial planning at U.S. BMO Private Bank in Chicago.

Take this example: "Mike and Mary are 66 and Mike's primary insurance amount is $2,000, while Mary's is $800," Williams says. "In this case, Mary files for her benefit starting at 66, and Mike files a restricted application to get half of that amount, $400. Then when he turns 70, he files for his own benefit to get an extra 132% of his FRA $2,000 benefit or $2,640 because he waited and got 8% each year in delayed retirement credits. Then Mary adds an additional $200 to her own benefit with the spousal benefit, getting to half of his PIA, $800 +$200 = $1,000."


Alternatively, the lower-earning spouse can "file and suspend" at 66, and the other person can start collecting spousal benefits at 66 until both reach 70, says Barbara Schelhorn, senior director at Sullivan, Bruyette, Speros & Blayney in McLean, Va.

"Social Security automatically gives each person the highest benefit possible," Schelhorn said. "You are really looking at cross-over points – at what point does it make sense to actually draw on benefits."

There are now more sophisticated software products for planners to run varying scenarios with their clients, says Mary Voll Miller, a financial advisor at Per Stirling Capital Management in Austin, Texas.

"It's very important to seek out an experienced planner to determine the benefits and consequences of various claiming strategies," Miller says.

Catherine Seeber, a principal at Wescott Financial Advisory Group in Philadelphia, Pa., says it's important to clarify that even if a lower-earning spouse is taking their own benefit at the death of the higher-earning spouse, they are still eligible to receive 100% of the deceased spouse's higher benefit, as a survivor.

Katie Kuehner-Hebert is a freelance writer in Running Springs, Calif. She has contributed to American Banker, Risk & Insurance and Human Resource Executive.

This story is part of a 30-day series on Social Security and retirement income strategies.

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