When spouses both receive Social Security Benefits, they have an incentive to maximize the benefit of the lower lifetime earner by allowing him or her to receive spousal benefits based on the higher lifetime earner.
On the other hand, the married couple also has an incentive to postpone the higher earner’s election to receive Social Security so that they get the maximum benefit. An election at the age of 62 years will be at a lower percentage than the full benefit at 67 years of age.
Here’s the rub: the lower earner cannot elect spousal benefits until after the higher earner elects. That creates a dilemma: do you have the higher earner hold off to maximize benefits thereby forfeiting the lower earner’s right to the higher spousal benefits OR do you have the higher earner forfeit full benefits in order to let the spouse get spousal benefits? Continue reading “Social Security: The End of “File and Suspend” “