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Retirement Planning > Social Security > Claiming Strategies

Social Security Claiming: The Case of the 11-Year Age Gap

By John Manganaro

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This is the latest in a series of biweekly articles featuring Social Security claiming case studies drawn from the ALM publication “2024 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: Gap in Spouses’ Life Expectancy

Mike and Leslie are a married couple almost 11 years apart in age. Under Social Security’s claiming rules, their full retirement ages differ by several months. Mike reaches full retirement age at age 66 and eight months, while Leslie reaches full retirement age at 67.

With respect to their work histories, Mike made slightly less than his spouse. With respect to their projected longevity, Leslie is expected to survive Mike by approximately 12 years.

In the scenario, Mike was born in March 1958 and has an actuarially expected death age of 84, while Leslie was born in November 1968 and is expected to die at 87. Mike’s full retirement age benefit is $2,023, while Leslie’s is $2,198.

According to the authors, Mike and Leslie have as many as nine distinct claiming strategies to consider, and the difference in projected lifetime benefits for the couple vary by more than $130,000.

What the Numbers Say

The least efficient strategy would see Mike file at age 65 and 10 months in January 2024 for a reduced workers benefit of $1,910. Leslie would file for her worker benefit at age 62, drawing a reduced benefit of $1,547 before eventually switching to her survivor benefit of $1,910. This strategy would see the couple collect a projected $964,574 in total benefits.

A slightly better outcome is achieved if Leslie chooses to wait until her full retirement age of 67 and claim her benefit in November 2035, boosting the projected benefit total by about $10,000, to $974,854. Another $4,000 is added to the projection when Leslie acts the same but Mike waits for his full retirement age in November 2024, garnering a monthly benefit of $2,023 and resulting in a projected total of $980,049.

Another marginally improved approach would see Mike file for his full worker benefits of $2,023 in November 2024, while Leslie files at age 62 in December 2030. She would then eventually switch to her survivor benefit, resulting in a total projected benefit of $988,414. Similarly sized benefit projection increases come from assuming that Leslie waits to age 70 while Mike claims at either 65 or 66.

A bigger jump in benefits comes from assuming that Mike waits until March 2028 to file for his maximum worker benefits of $2,562. If Leslie also waits for the maximum claiming age and draws her benefit in November 2038, the projection jumps to $1.03 million.

An even better idea, according to the authors, is for Mike to file in March 2028 for his max worker benefits ($2,562) while Leslie files at age 67 in December 2035 for her full benefit of $2,198. Leslie would then eventually switch to collecting a larger survivor benefit of $2,562, resulting in a total projected benefit of $1.053 million.

The optimal approach, however, sees Mike file at age 70 in March 2028 for his maximum worker benefit, while Leslie files for her worker benefit ($1,547) at age 62 in December 2030. She then would switch to her survivor benefit of $2,562, garnering a total projected benefit of $1.09 million.

Credit: Chris Nichols/ALM

John Manganaro

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