Saying ‘I Do’ to Social Security

Millions of seniors rely on Social Security to supplement their retirement income.  Because your spouse’s earnings record can impact your own benefit levels, many people who find their second loves later in life believe they would be better off if the remained single. 

This is typically because of the way Social Security treats second marriages from a benefits prospective; however, there are other factors at play as well.  If you are eligible to receive Social Security, you can collect based on half the benefit level your spouse earned or the full benefit level you earned.  If you marry twice, you are only allowed to claim spousal benefits on one of your spouse’s records.  If your spousal benefits from your second spouse are higher than what you would get based on your first spouse’s record, you can claim the higher benefit level. 

Although older individuals forego marriage the second time around, there are benefits to tying the knot.  First, married couples can give gifts of unlimited sizes to one another.  When a member of a married couple passes away, the spouse has better options when it comes to retirement accounts.  Additionally, for couples that have substantial income differences, the tax benefits that come from being married and filing jointly may outweigh any hits that come from changes to their Social Security.

See Chuck Saletta, Does Social Security Encourage Seniors to Remarry? The Motley Fool. March 21, 2015.