Your Decision to Claim Social Security Early Could Really Hurt Your Spouse. Here’s How

Your choice of when to claim Social Security may feel like a very personal decision. After all, many people need Social Security checks to support themselves in retirement. If that’s the case, your decision about when to claim benefits may essentially be the same thing as a choice about when to leave work. You also earn Social Security benefits by paying taxes throughout your career, so this is money that you have worked for and should get to decide when to access.

When you are married, though, you can’t make this decision solely on your own. You must think about your spouse.

That’s because if you decide to make an early Social Security claim, you could end up really hurting your spouse. You don’t want to make this mistake and claim early without understanding the implications, so you must understand the long-term impact of an early Social Security claim.

What is an early Social Security claim?

The first thing that you need to know is what exactly an early Social Security claim is. Specifically, an early claim is one that occurs prior to your full retirement age (FRA). FRA is 67 for anyone born in 1960 or later. If you start your benefits even a month before this, you have claimed early and are subject to early-filing penalties. These penalties result in a:

• 5/9 of 1% reduction for each of the first 36 months you receive Social Security retirement income before FRA
• 5/12 of 1% reduction for each additional month  beyond 36 months that you receive benefits before FRA

If your FRA is 67, the earliest possible claim at 62 could result in a 30% reduction in your benefits. 

It’s also worth noting that you can increase your monthly Social Security benefits until 70. If you wait beyond your FRA, you earn delayed retirement credits until that age. Those delayed retirement credits result in a 2/3 of 1% monthly increase in your standard benefit, which adds up to an 8% annual increase.

If your FRA is 67 and you wait until 70 to claim benefits, you end up with a 24% increase. That’s very substantial. In fact, because of the benefits of delaying beyond FRA, some people may view an early Social Security claim as one that occurs prior to the age of 70.

How can an early Social Security claim hurt your spouse?

If you make an early Social Security claim, and especially if you start your benefits before your FRA, you’ve decided to accept a smaller benefit than you otherwise could have had. This is your choice to make, and it’s not always an unreasonable choice. However, the problem is that your decision doesn’t just impact you. 

If you were the higher earner in your household, your decision also affects your spouse. It does this because it shrinks survivor benefits. Those are the benefits your spouse could receive if you pass away.

Survivor benefits can equal your standard Social Security benefit if you’ve passed away before reaching your full retirement age. However, if you have claimed your own benefit early, survivor benefits will be reduced permanently for your widow(er) because of that choice. On the flip side, if you wait to claim benefits until 70 and increase your monthly Social Security payments, your spouse gets to keep that higher amount as a Social Security survivor benefit. 

Many people struggle financially when they lose a spouse, especially one who was the higher earner and who was receiving a larger Social Security payment. Your spouse’s financial woes could be made much worse after your death if you’ve shrunk the survivor benefits they’re entitled to collect.

Before you make an early Social Security claim, and this happens to your husband or wife, you must make sure you understand the implications of your decision and have a plan to ensure your surviving spouse’s financial security. A financial advisor can help you with this process, including helping you to decide if a delayed Social Security claim may be a better bet to help your spouse have enough money after you’re gone.