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AARP Bulletin

Financially Speaking

When to Claim Social Security Benefits

Worried about outliving your money? Protect your retirement — and your spouse

Strategies for married couples

Couples can greatly increase their lifetime Social Security wealth by coordinating benefits — if you can afford to delay your claim, say, because one partner is working or you have savings to live on. Here are two examples, assuming a bread-winning husband with a slightly younger wife who has a modest Social Security benefit of her own:

1. Claim and switch. The wife takes her own retirement benefit at 62. When her husband reaches full retirement age, he files for spousal benefits on his wife's account (that's called a "restricted application"; he has to be at least 66 to qualify). He would get half of her benefit. At 70, the husband switches to his own benefit, which has grown by 8 percent a year plus cost-of-living increases. If he dies first, his wife switches to her survivor's benefit, now enhanced by those 8 percent gains.

2. File and suspend. The husband files for his own retirement benefit at 66 but asks that it be suspended. That lets his future benefit continue to grow. His wife immediately files for spousal benefits on her husband's account. Again, she would get one-half of his benefit. At 70, he claims his payments, including those lovely 8 percent increases.

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They'd play it differently if both partners had high earnings. The husband might file and suspend at 66. When the wife reaches 66, she'd request spousal benefits on his account. At 70, each of them would claim retirement benefits based on their personal earnings record.

The optimum strategy will vary, depending on the couple's ages and which spouse has the higher earnings. For help, check out AARP's free Social Security Benefits Calculator or the Social Security Administration's website. Or you can go to two fee-based websites: SocialSecurityChoices.com, which gives you a personal report for $39.99, and SocialSecuritySolutions.com, which charges $20 for a simple report and $50 and up for interactive reports that let you compare various strategies.

A note to same-sex couples

Under Social Security law, you can get spousal benefits only if you live in one of the 13 states (or Washington, D.C.) that recognize your marriage; also, perhaps, in the seven states that permit civil unions with inheritance rights. Still, retired same-sex couples in other states may want to file for benefits now, to establish the date of their request. If the law changes, you could petition for benefits based on your claim date.

Jane Bryant Quinn is a personal finance expert and the author of Making the Most of Your Money NOW.

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