Liz Weston

Dear Liz: My wife is a retired schoolteacher who has a pension. Because she is subject to the government pension offset, she will not be eligible for my Social Security benefit when I pass. My plan was to wait until 70 to file to maximize my benefit. This usually has the advantage of also increasing the survivor benefit that a spouse would receive.

Considering the government pension offset would eliminate any benefit to her, is waiting until 70 still the best strategy? Do I view it as longevity insurance with the understanding that I, or my wife, may never receive a nickel from Social Security if I die before claiming?

Answer: As you know, it’s usually advisable for the higher earner in a couple to delay starting Social Security as long as possible, because that increases the survivor benefit one spouse will get after the other dies.

Waiting until 70, when your benefit maxes out, can still make sense. Most people will live past the “break even” age when the larger checks more than offset the forgone benefits. The average life expectancy for a 65-year-old male is another 18 years. If you’re well educated, higher income or have longevity in your family, your life expectancy is probably even longer.

Delaying Social Security also can help minimize the “tax torpedo.” This is a surge in marginal tax rates that affects middle-income households caused by the unique way Social Security benefits are taxed. Drawing from retirement accounts first and then starting Social Security at 70 can result in considerable tax savings.

Also, in today’s low-rate environment, there’s no other investment that promises a guaranteed 8% annual return, which is what you get by delaying Social Security after your full retirement age.

To see which claiming strategy makes sense, consider using a Social Security claiming calculator that can include government pension offset situations such as Maximize My Social Security or Social Security Solutions.