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How to Help Married Couples Maximize Social Security

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What You Need to Know

  • If both spouses are in good health and have a family history of good health, consider delaying benefits until age 70.
  • When the lower-wage earner claims benefits first, the bigger benefit can continue to grow.
  • The earnings test is a cash flow penalty, not a tax.

When considering Social Security claiming strategies, it’s critical to note some unique opportunities available to your married clients. With two different Social Security benefits available, it’s essential to calculate the optimal time to claim for each spouse.

The clients’ claiming decision will affect these three areas:

  1. Cash flow.
  2. How they use other assets in retirement to support their overall retirement income goals.
  3. The total tax they will pay in retirement.

Financial advisors should help married clients evaluate all Social Security claiming options, both in a vacuum and in the context of the overall financial plan. 

Here are a few critical considerations as you build these strategies.

Both Delay

If both spouses are in good health and have a family history of good health, consider delaying benefits until age 70. The couple will receive the most significant Social Security benefit possible. This will create, however, an income gap from when they stop working until those Social Security benefits begin.

Roth conversions in that window can help avoid a situation later in retirement where minimum distributions are taxed at a higher marginal rate than could be achieved had the client completed Roth conversions or used IRA withdrawals for income in the early years of retirement. These techniques can create a lower lifetime tax bill. 

Split Strategy

If you need to get some cash flow into the household sooner, consider a “split strategy.” The spouse in the household who earns less claims benefits as soon as possible, reducing the amount that needs to be drawn from other assets. More importantly, it allows the higher-wage earner’s benefit to grow as large as it can be at 70. The split strategy preserves the higher-wage earner’s benefit throughout their lifetime and the lifetime of the surviving spouse.

When one spouse dies, the smaller benefit will go away. The more considerable benefit will continue. Many widows and widowers live for several years after the death of their spouse, and maximizing the second benefit can be excellent protection against poverty and stress in older age.

The split strategy also provides a lot of tax flexibility. At worst, 85% of that smaller Social Security benefit will be taxable as ordinary income. Advisors can do Roth conversions or harvest from IRA money while delaying the higher-wage earner’s benefit.

The Earnings Test

Sometimes the lower-wage earner is younger and might still be working. In this case, consider the earnings test. The Social Security earnings test is a two-tier test. The first tier is between age 62 and the calendar year the client reaches full retirement age (FRA). The threshold is $18,000, and it moves every year. For every dollar that the client exceeds the earnings test threshold, they lose 50 cents of a Social Security benefit. Many people think, “If I’ve earned over $18,000 this year, I can’t claim Social Security benefits.”

More on this topic

That’s not the case. It often still makes sense for the lower-wage earner in a married household to claim early, even if they’re a bit over that earnings test threshold, because they may lose only a few of their benefit checks throughout the year.

For example, let’s say a client is working and earning $30,000 a year. The client is $12,000 over the earnings threshold. That means $12,000 divided by two is the penalty amount, or $6,000. Their Social Security benefit is $1,500. That means they would forfeit four checks during the year. They would collect eight checks instead of 12.

When they reach FRA, their benefit will be adjusted to account for the months they did not receive a check. While they don’t get a lump sum for those checks, their future benefit is increased by the amount they would have received if they had not elected during those months. The earnings test is a cash flow penalty, not a tax. 

When your client reaches FRA during the calendar year, the second threshold is considerably higher than the first threshold. Let’s say your client reaches FRA in March. They could earn $40,000 in January and February ($20,000 each month) and still qualify to get their full benefits through the entire year because of how that threshold works in the calendar year they reach FRA.

There are many nuances with the earnings test. It might only be three months or six months or nine months of extra checks, but several thousand dollars over a few months can add up.

Financial advisors can deliver significant value for married clients by crafting well-thought-out Social Security strategies that are coordinated with the clients’ overall retirement income needs, considering the clients’ goals and health.


Joe Elsasser developed his Social Security Timing software in 2010 because, as a practicing financial advisor, he couldn’t find a Social Security tool that would help his clients make the best decision about when to elect their benefits. Joe later founded Covisum, a financial tech company focused on creating a shared vision throughout the financial planning process.

In 2016, Covisum introduced Tax Clarity, which helps financial advisors show their clients the hidden effective marginal income tax rates that can significantly affect cash flow in retirement. In early 2017, Covisum acquired SmartRisk, software that allows advisors to model “what-if” scenarios with account positions and align a client’s risk tolerance with their portfolio risk. In January 2019, Covisum launched Income InSight, an income planning tool.

Covisum powers some of the nation’s largest financial planning institutions and serves more than 20,000 financial advisors.