{"id":5554,"date":"2025-01-06T12:00:00","date_gmt":"2025-01-06T12:00:00","guid":{"rendered":"https:\/\/mai.capital\/?post_type=resources&#038;p=5554"},"modified":"2025-05-01T14:15:31","modified_gmt":"2025-05-01T19:15:31","slug":"social-security-claiming-strategies","status":"publish","type":"resources","link":"https:\/\/mai.capital\/resources\/social-security-claiming-strategies\/","title":{"rendered":"Social Security Claiming Strategies"},"content":{"rendered":"\n<p>Social Security is based on an individual\u2019s lifetime earnings, using the highest 35 years of earnings. These earnings are used to calculate the Primary Insurance Amount (PIA), which is the amount paid to an individual at Full Retirement Age (FRA). An individual\u2019s FRA is determined by their year of birth.\u00a0 Individuals can claim a reduced amount as soon as age 62, or they can delay their claim up to age 70.\u00a0 There is a guaranteed 8% annual increase with the PIA each year delayed after FRA up to age 70.\u00a0The following explores the various Social Security claiming strategies available to retirees and will provide insights into optimizing these strategies to enhance overall retirement planning.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Spousal Benefits for Married Couples<\/strong><\/h4>\n\n\n\n<p>Married couples have the option to choose when to claim additional spousal benefits.\u00a0Spousal benefits are available to the lower income spouse. A spousal benefit can be a maximum of 50% of the primary worker\u2019s PIA if the spouse claims this benefit at FRA and can go as low as 32.5% if the spouse claims this benefit at age 62.\u00a0The following are examples of when to claim spousal benefits.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Lower-Earning Spouse\u2019s PIA is less than 50% of Higher-Earning Spouse\u2019s PIA<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Lower-earning spouse claims their PIA as early as possible.<\/li>\n\n\n\n<li>Higher-earning spouse claims at 70.<\/li>\n\n\n\n<li>&nbsp;Once the higher-earning spouse claims at 70, the lower-earning spouse claims the additional spousal benefit.<\/li>\n\n\n\n<li>This strategy generates income sooner while maximizing the higher-earning spouse\u2019s benefit over both lifetimes.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Lower-Earning Spouse\u2019s PIA is more than 50% of Higher-Earning Spouse\u2019s PIA<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Both spouses delay claiming Social Security to age 70.<\/li>\n\n\n\n<li>This strategy will maximize lifetime benefits over average or long-term life expectancies.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Divorced Spouse Benefits<\/strong><\/h4>\n\n\n\n<p>Divorced spouses face a unique set of rules when claiming Social Security. The following highlights the rules:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The marriage lasted 10 years or more.<\/li>\n\n\n\n<li>The person receiving the divorced spouse benefit is currently unmarried.<\/li>\n\n\n\n<li>The ex-spouse is at least age 62.<\/li>\n\n\n\n<li>If the divorce was more than two years earlier, the ex-spouse does not need to have filed for benefits.<\/li>\n\n\n\n<li>Divorced spouse benefits can be anonymous.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Survivor Benefits<\/strong><\/h4>\n\n\n\n<p>Social Security Survivor benefits are paid to widows, widowers, and dependents of eligible workers. The following is a summary of the widow(er) benefits only.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Older Widow(er)<\/strong><\/h4>\n\n\n\n<p>If a spouse dies while both are receiving benefits, the widow(er) may switch to the higher benefit.\u00a0If the widow(er)\u2019s benefit is higher they will keep that benefit. If not, they will switch to the higher survivor benefit, which will generally be equal to the decedent\u2019s benefit at the time of death. It\u2019s important to note that the widow(er) will only be receiving one benefit, the higher of their own benefit or the survivor benefit.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Younger Widow(er)<\/strong><\/h4>\n\n\n\n<p>If a spouse dies at a young age, the widow(er) will be eligible to claim a survivor benefit as early as age 60. At the time of the decedent\u2019s death, the Social Security Administration will calculate a \u201cdeath PIA\u201d which is approximately equal to the decedent\u2019s PIA.\u00a0This would be the amount the decedent\u2019s retirement benefit would have been had they lived and worked to full retirement age. If claimed at age 60, the widow(er) will receive 71.5% of the deceased worker\u2019s \u201cdeath PIA\u201d.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Earnings Limit Rule<\/strong><\/h4>\n\n\n\n<p>There is a limit to how much an individual can earn and still receive Social Security benefits. This limit is applied to all Social Security benefits, including Survivor benefits. This limit gets adjusted every year. In 2025, the earnings limit is $23,400 per year if the individual is under their full retirement age for the entire year. Social Security will be reduced by $1 for every $2 earned over this limit. In the year the individual reaches full retirement age, the earnings limit increases to $62,160 and Social Security benefits will be reduced by $1 for every $3 earned over this limit. Once an individual reaches their full retirement age there is no earnings limitation. Only gross employment wages and net income from self-employment are considered earnings. There is a special earnings limit rule for individuals who file for benefits mid-year and have already earned more than the annual earnings limit amount. This rule will allow for the payment of a full Social Security check for any whole month the Social Security Administration considers the individual as retired. With the special rule, if an individual is under full retirement age for the entire year, they are considered retired in any month their earnings are $1,950 or less and the individual did not perform substantial services in self-employment. In the year the individual will reach full retirement age, they are considered retired in any month their earnings are $5,180 or less and they did not perform substantial services in self-employment. Once the next year starts, the deductions are based solely on the annual earnings limit.<\/p>\n\n\n\n<p>Social Security claiming strategies can be complex. <a href=\"https:\/\/mai.capital\/contact-us\/\">Schedule a meeting<\/a> with your MAI Wealth Advisor to discuss the best strategies that will benefit you.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"disclaimer\">Information updated as of Wednesday, December 11, 2024.<\/p>\n\n\n\n<p class=\"disclaimer\">Please send your questions, comments and feedback to: info@mai.capital. The opinions and analyses expressed herein are subject to change at any time. Any suggestions contained herein are general, and do not take into account an individual\u2019s or entity\u2019s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Distribution hereof does not constitute legal, tax, accounting, investment or other professional advice. Recipients should consult their professional advisors prior to acting on the information set forth herein. In accordance with certain Treasury Regulations, we inform you that any federal tax conclusions set forth in this communication were not intended or written to be used, and cannot be used by any taxpayer, for the purposes of avoiding penalties that may be imposed by the Internal Revenue Service.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We explore the various Social Security claiming strategies available to retirees and provide insights into optimizing these strategies to enhance overall retirement planning.<\/p>\n","protected":false},"author":8,"featured_media":5558,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"tags":[100],"resources_category":[7],"evoke_category":[],"evoke_tag":[],"class_list":["post-5554","resources","type-resources","status-publish","format-standard","has-post-thumbnail","hentry","tag-retirement-planning","resources_category-insights"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Social Security Claiming Strategies<\/title>\n<meta name=\"description\" content=\"We explore the various Social Security claiming strategies available to retirees and provide insights to enhance retirement planning.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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