Social Security – Getting What You Deserve

October 3, 2013

Couple Looking at CalculatorMillions of baby boomers are now retiring every year, yet few are making the best decisions when it comes to their Social Security benefits. The Social Security Act was enacted in 1935 to provide benefits and aid to the needy. Unfortunately, guidance on when and how to select the appropriate benefits when considering things like working during retirement, life expectancy, spousal benefits and cash flow were not included.

It would seem that selecting your benefits would be as simple as picking a retirement date and collecting the benefit amount that is printed on your Social Security statement. However, there are many strategies and techniques that allow individuals and couples to maximize their Social Security benefits that most people are not aware of.

For married couples, the major question is often centered on what age makes the most sense to begin taking benefits. Traditionally, the higher wage earner (spouse A) collects his or her benefit at full retirement age, and the other spouse (spouse B) takes the spousal benefit which is one-half of the higher wage-earning spouse A’s benefit. This continues until spouse A passes away, and then spouse B begins collecting the survivor’s benefit.

What many fail to recognize is that they have alternatives to this scenario. Consider a married couple that have similar social security retirement benefit amounts. This means that over their working years that they have earned approximately the same amount or the maximum amount of wages $113,700 (2013) included in the social security benefit calculation.

Let’s review the action plan prepared for Tom and Melissa Jones as an illustration.


  • The following recommendations are based off of the Joneses’ Social Security statements dated November 10, 2012.
  • At Tom’s full retirement age of 66, his full retirement benefit is $2,400. At Melissa’s full retirement age of 66, her full retirement benefit is $2,100.
  • Tom is assumed to live to age 83 and Melissa to age 95.
  • All results are shown pretax in today’s dollars.


September 2019: Tom files and suspends so that Melissa may apply for spousal benefits.

September 2019: Melissa files, restricts application to spousal benefits, receiving approximately $14,500 per year.

November 2020: Tom files for own benefits, at age 70, receiving approximately $38,500 per year.

September 2023: Melissa files for own benefits, at age 70, receiving approximately $32,600 per year.

November 2033:  Melissa receives the survivor’s benefit of approximately $38,500 per year.

The estimated cumulative benefit this couple will receive from Social Security is over $1,300,000. This strategy maximizes income over the years Tom and Melissa have together. It sounds more confusing than it actually is. By breaking down the steps Tom and Melissa now have a plan that they can stick to and follow.

Let’s look at this from your standpoint. This strategy involves more steps and there are critical items that must be taken into consideration during the data gathering process. If liquidity is your concern, then you should probably begin taking benefits as soon as possible for most individuals this is usually 62. Likewise, if health issues are prevalent or run in your family then again you should begin taking benefits as soon as possible. If you plan on working during retirement, then you may want to consider delaying your benefits to avoid the reduction in the benefit that you receive which can be as little as one dollar for every two you earn below full retirement age or one dollar for every three after full retirement age and depending upon your earnings.

In the world of financial planning, it is not uncommon to figure that people have left approximately 20% of the Social Security benefits they have earned over their lifetimes on the table because of the filing strategies they have chosen. You deserve to receive the full benefit of what you’ve earned and for this reason alone it is prudent to sit down with a financial advisor to determine which strategy maximizes your benefits for you and your loved ones. 

Greg Johnson, CFP®