Two Social Security Claiming Case Studies, One Conclusion

George's FRA benefit is $2,647, while Joan's is $724, and the pair has as many as six claiming scenarios to consider. These come along with more than a $100,000 difference in the lifetime projected benefits for the couple.

What the Numbers Show

The least optimal strategy for this couple, according to the authors, would have seen George file in January 2024 for a slightly reduced worker benefit of $2,602, while Joan waits to file for her reduced benefit of $509 in October 2024. Eventually, Joan would switch to collecting her survivor benefit ($2,602), delivering projected lifetime benefits of just over $1 million.

A better approach would have seen George wait for April 2024 to file for his FRA worker benefit of $2,647, while Joan waits until September 2029 to file for her FRA benefit of $724. She then, once again, eventually switches to her survivor benefit, delivering about $18,000 in additional lifetime benefits.

A much bigger increase comes from assuming that George waits until October 2027 to file for his maximum worker benefit of $3,388, while Joan waits until age 67 to get her FRA worker benefit of $724. She would also file for her spousal benefit at that time, and this would "top up" her benefit to $1323.50.

Joan then switches to the maximum survivor benefit down the line, garnering a total projected lifetime benefit of more than $1.1 million.

So, Is Delaying Always Best?

While these case studies show the power of delayed Social Security claiming in many scenarios, there are particular situations where claiming earlier makes sense — either from a benefit maximization perspective or as a matter of necessity.

For example, a prior case study in this series showed that a couple with a big age gap could potentially benefit from the lower-earning spouse claiming their benefit at age 62 while the higher earner — the older member of the couple — waits until age 70 to claim their benefit. This approach delivers an excess $130,000 in projected benefits of early claiming.

In other situations, people simply cannot afford to delay claiming due to their inability to work beyond age 62 or due to a lack of other income sources that can make waiting for the FRA or maximum benefit feasible. In the end, each couple and individual has to asses their distinct claiming options, and wealth maximization isn't the only factor in the calculus.

Credit: Chris Nichols/ALM