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Maximizing Your Social Security Benefits

More baby boomers are beginning to understand the long-term impact of their decisions on claiming Social Security. Instead of claiming benefits immediately when available, they are seeking options to maximize benefits. While various claiming strategies are simple in theory, the rules are so complicated that sometimes even the Social Security Office staff don’t understand them, hence mistakes are being made. I attended a Social Security Planning workshop by Elaine Floyd at the 2013 Northern California conference from Financial Planning Association in which she discussed some common questions and misunderstandings.

Common Questions and Misunderstandings

  1. Spousal Benefit Calculation: If my husband filed his benefit at age 62, will my spousal benefit be 50% of his reduced benefit? No, the spousal benefit is calculated on the Primary Insurance Amount (PIA) of the husband’s record. By the same token if the husband delayed his benefit until age 70, the spousal benefit would not have any increase from the delayed credit.
  2. COLA for Unclaimed Benefits: Do unclaimed benefits earn a Cost of Living Adjustment? No, the benefit will not earn COLA. So if you want to do the file-and-suspend strategy, you should do it as soon as you reach FRA.
  3. Spousal Benefit before Full Retirement Age (FRA): Can I claim a spousal benefit as soon as I turn 62? According to Social Security website, your spousal benefit is reduced to 35% at age 62. Moreover, you may be surprised to find that you end up getting your own reduced retirement benefit instead of the spousal benefit and that you are stuck with the reduced benefit for the rest of your life! The caveat is that under the rule, anyone who applies for Social Security before full retirement age is deemed to be filing for both the earned benefit and the spousal benefit; if the earned benefit amount is higher, then Social Security will overlook the spousal benefit; you don’t have a choice in that matter. After full retirement age you do.
  4. Length of Marriage: Does the 10 year marriage rule for divorced spouse have to be consecutive? For those who got divorced and remarried again, the rule would consider that as consecutive marriage only if both events happen within the same calendar year.
  5. Divorced Spouse Benefit before Full Retirement Age: Can I take my divorced-spouse benefit at age 62 and switch to my own benefit at Full Retirement Age? No. The rule is similar to married spousal benefit from Question 3. If you file before FRA, you get the larger of your own or ex-spousal benefit, either way the benefit will be reduced based on your age. However, if you wait until you reach the FRA, you can do the restricted application and choose to collect the ex-spousal benefit and continue to let your own benefit grow until age 70.
  6. Remarry: In order to keep my ex-spousal benefit - I can never remarry? It depends on the type of benefit you receive. If it was a divorced spouse benefit, then the new marriage will nullify the benefit. If it was a surviving divorced spouse benefit, then you can remarry after age 60. So before you say “I do”, consider waiting until you reach the magic age of 60.
  7. HSA Contributions: Can I continue with my Health Saving Account (HSA) contributions once I file for Social Security at age 66? No, you are required to enroll in Medicare Part A and HSA contributions must stop.


Social Security planning strategies can be beneficial to baby boomers but planning should be done with caution. Be sure to consult with your advisors whenever you want to undertake an permanent election.