Authored by Boyce Hinman, founder and director of the California Communities United Institute, and member of Marriage Equality USA. Hinman has been writing and posting a series, “Monday Morning Marriage Memo,” as part of his Anatomy for Justice blog. This article was first published there, and is republished here with the author’s permission. Hinman resides in and serves California, therefore the posts sometimes have a California slant.
NOTE: Marriage Equality USA is not a legal firm or a tax/accounting firm. No action should be taken based solely on the content of our news blog or website.
Under current federal law a spouse who has reached age 62 can claim a Social Security benefit based on his or her own earnings. That spouse could get a higher monthly payment if he or she waits to age 65 before claiming the benefit. Once the spouse submits the claim, he or she will start receiving monthly checks from Social Security.
There is a way that some same sex married couples can manage their Social Security to maximize their total household Social Security income.
Note: I am not an attorney or a qualified tax expert. No action should be taken based solely on the content of these memos. However, I hope the memos will help you ask the right questions of people who are qualified in these issues.
Here is how a same sex married couple might be able to maximize their Social Security income. Federal law allows someone (let’s call him Tom) to claim a Social Security benefit based on the earnings of his or her spouse. Let’s call him George. If George had much higher income than Tom, Tom’s Social Security check might be higher if he claimed as the spouse George instead of claiming the monthly amount due based on his own earnings.
The problem is that, in order for Tom to claim Social Security as George’s spouse, George must also claim his Social Security benefit. The problem with that is that locks in the amount that George can receive in each month from Social Security.
George could claim Social Security as early as when he reaches age 62. But that means he would be locked in to a relatively low Social Security monthly check. If he waited until he was 70 years old his monthly check would be higher. In fact each year beyond 62 that he continues working, and not claiming Social Security, (up until age 70) the amount of Social Security dollars he would qualify for goes up by 8%.
Then too, George’s salary, between his 62nd and 70th birthdays are likely to be the highest he earned during his work life. That salary increase would increase the amount he qualifies for in Social Security monthly checks.
It would be a shame for George to have to sacrifice that extra Social Security income just so Tom can claim Social Security based on George’s work history. But actually George does not have to make that sacrifice.
Under current law George can file for Social Security benefits, but then immediately suspend receipt of those benefits until some future date. By doing this, Tom can claim a spousal benefit and George can let his or her own retirement benefit grow at 8 percent per year. In this way some same sex couples can significantly increase the amount of monthly benefits they receive from Social Security.