When planning for retirement, the structuring of Social Security benefits often gets little attention, and, as a result, retirees are leaving tens of thousands of dollars on the table. The one area that creates the most confusion, and also has the most options to consider, is the spousal benefit. There are many different spousal benefit options to consider that can increase your overall benefit. For a working couple, one way is to collect spousal benefits while one of the spouses continues to work. Here's a brief explanation:
If one spouse stops working at age 62, he or she can start collecting benefits. If the other spouse wants to continue to work past age 66 in order to accrue a higher benefit, he or she can start collecting spousal benefits bases on the other spouse's Social Security amount. So, while he is working, he will receive half of his wife's benefit amount and his own benefits will be left to accrue. If he waits until age 70, he will receive a bonus of 8% per year on the accrued benefit, as substantial increase in income over what he would have received if he took payments starting at age 65.