The Scenario: Tom, 64, works full-time; Sandra, 60, is a homemaker. His Social Security benefit at 66 will be $2,000 a month. He'd like to wait until he's 68 to apply, which will bump the benefit to $2,320. But he's not sure he and Sandra can manage that long without it.
The Better Way: At 66, Tom should apply for his $2,000 monthly benefit, which allows Sandra to file for a spousal benefit. Tom can then—surprise—voluntarily suspend his benefit (at FRA, he has that option) so it will keep growing. Meantime, Sandra continues receiving her spousal benefit.
The Payoff: Sandra gets $650 a month. Why not $1,000—half of Tom's benefit? Because she's only 62. No matter whose earnings record it's based on, the amount you get depends on your age when you apply for it.
The Scenario: David and Susan, both 62, were divorced after 15 years of marriage. David always earned much more than Susan. He remarried; she didn't. Susan needs income now. She figures she's stuck with her reduced benefit.
The Better Way: Since their marriage lasted at least ten years and ended more than two years ago, and Susan hasn't remarried, she is eligible for benefits based on David's record. She can file for a spousal benefit even if he hasn't yet filed for benefits himself.
The Payoff: Susan will get whichever amount is larger: her spousal benefit or the benefit based on her own work record. If she was at FRA, she could do as Bob does in the first example, limiting her application to the spousal benefit to keep her own benefit growing.
The moneymaking lesson here is to fully explore your choices. Use Social Security's online calculator to play with different assumptions, or make an appointment to visit your local Social Security office. Don't hesitate to ask agency staff to check with supervisors if they're unfamiliar with these seldom-used strategies.
Lynn Brenner is a New York City-based writer whose work has appeared in Business Week, The New York Times, and Newsday. She answers personal-finance questions online at lynnbrennersfamilyfinance.com.