This is the latest in a series of articles featuring Social Security claiming case studies drawn from the ALM publication "2025 Social Security & Medicare Facts," by Michael Thomas with support from Jim Blair, a former Social Security administrator, and Marc Kiner, a planning expert with extensive experience in public accounting.
The Scenario
Roger was born in August 1959 and has a full retirement age benefit of $2,278 at age 66 years and 10 months. His projected longevity is just over age 84.
Susan, his wife, is younger and will not turn 62 until 2030, having been born in June 1968. Her own full retirement age benefit is $1,209 at age 67, and her projected longevity is just over 87.
Considered alone, the couple’s claiming scenario is fairly straightforward. Their relatively significant age gap and the fact that Susan's benefit is more modest than Roger's give them a strong incentive to delay at least the claiming of his benefit.
However, Roger and Susan also have two dependent children. One is almost 18 and the other is 16. Roger needs to file for retirement benefits so the children can receive benefits until they reach 18 or, if still in high school, until age 19 or they graduate, whichever comes first. If Roger does not file before that time, the children lose all benefits, and those benefits are never recovered. However, by taking benefits prior to age 70, the survivor benefit for Susan will be less.
What the Numbers Say
Given the number of variables to consider, Roger and Susan have no fewer than nine potential claiming strategies to evaluate, and the total projected lifetime benefit between the “best” and “worst” claiming option from a hard-dollar benefit maximization perspective is nearly $150,000.
As noted, the “right” claiming decision will need to strike a compromise between the desire to receive benefits based on the children’s eligibility versus maximizing Susan’s survivor benefit as a longevity hedge. Such a calculation, in turn, hinges significantly on both the children’s age and the surviving spouse’s expected longevity.
Here, the lowest lifetime projected benefit for the family comes from assuming Roger would have filed in January 2025 for a reduced worker benefit of $2,062 at age 65 and 5 months. Likewise, the couple would have then filed for both child benefits, with one ending in March of the same year and the other in October 2026. Then, in June 2038, Susan files for a delayed maximum worker benefit ($1,499) at age 70 before eventually switching to a widow’s benefit of $2,062. The total projected benefit in this case is $899,910.
The couple can boost this projection to $934,556 if Roger were to wait until June 2026 to file for his full worker benefit ($2,278) at age 66 and 10 months. Later, in June 2035, Susan files for her full worker benefit ($1,209) before eventually switching to her widow’s benefit ($2,278). While the overall expected payment is bigger, the couple loses out on several years of child benefits in this scenario.
A similar projected lifetime benefit amount of $935,395 comes from assuming Roger again filed for a reduced worker benefit ($2,062) in January 2025 and that the couple filed for child benefits at the same time, subject to the same expiration dates. Susan instead files for worker benefits early, at age 62 and 1 month, before switching to her widow’s benefit ($2,062). The overall benefit projection increases only marginally in this case, but the timing and nature of the income is different.
Additional modest benefit increases come from making a variety of different assumptions about the couple’s claiming decisions, with higher benefit amounts generally being associated with Roger making the decision to claim later in order to maximize his own benefit amount and Susan claiming earlier in order to lengthen the amount of time her own benefit is being paid out.
From a hard-dollar benefit maximization perspective, the superior approach sees Roger file in August 2029 for his maximum age 70 worker benefit of $2,885. Susan, on the other hand, files in June of 2030 for a reduced worker benefit of $851. If she later switches to the widow benefit through her anticipated longevity, this approach delivers a projected lifetime benefit for the couple of $1,048,305.
Credit: David Palmer/ALM
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