The conventional wisdom of delaying Social Security benefits until age 70 to maximize monthly payouts is being reevaluated, particularly for married couples. While waiting can increase benefits by 8% for each year past full retirement age, the decision becomes complex when considering the financial implications for surviving spouses, who may face a significant drop in household income after the death of one partner.
For many couples, particularly those without substantial income outside Social Security, the strategy of having the higher earner delay until age 70 while the lower earner claims earlier can be optimal. This approach not only maximizes the survivor benefit but also provides immediate income, reducing the need to prematurely withdraw from retirement savings. However, it does come with trade-offs, including a permanently reduced benefit for the lower earner.
Ultimately, the decision on when to claim Social Security should be tailored to individual circumstances, underscoring the importance of consulting a financial planner to navigate these complexities effectively.
Source: fool.com