If you were born before January 2, 1954, you may be able to get more out of your Social Security benefits by filing in a strategic manner. You may be able to file what is known as a restricted application for spousal benefits and receive 50% of your spouse’s (or ex-spouse’s) primary insurance amount (PIA) between the ages of 66 and 70 and let your own benefit grow at 8% per year. Then, at age 70, you refile a regular application and receive 132% of your PIA.
Conditions of Restricted Application for Spousal Benefits
To take advantage of this special filing strategy, the following conditions must be met:
- You have not filed for Social Security benefits.
- You must be at least full retirement age (age 66 if born between 1943-1954).
- Your spouse must have already filed for benefits on their own record. It doesn’t matter what age your spouse was when they originally filed.
If you are currently unmarried or got married after age 60, you can file on your ex-spouse’s record if:
- You were married for at least 10 years.
- Divorced within the past two years, your ex-spouse has already filed for benefits.
- Divorced more than two years ago, your ex-spouse need not have already filed.
If you are a widow/widower, you can file on your deceased spouse’s record:
- If your spouse died while you were still married, regardless of how long you were married.
- If your spouse died after you were divorced, you had to have been married for at least 10 years.
Example of How a Restricted Application Works
Jack and Jill are married and they are both age 66, which is their full retirement age for Social Security purposes. Jack’s PIA is $2,000 per month and Jill’s is $1,500. Jill filed for Social Security at her age 62, receiving a reduced benefit of 75% of her PIA ($1,125). Jack files a restricted application for spousal benefits at age 66, allowing him to receive 50% of Jill’s PIA ($800). Note the spousal benefit is based on the spouse’s PIA and not the reduced amount they received because they filed early.
When Jack turns 70, he should then refile with the Social Security Administration (SSA) on his own record. At this point he will receive 132% of what he would have received if he had filed for his own benefits at age 66 ($2,640) plus any cost of living increases the SSA applied between age 66 and 70.
How to File
If you are filing on a current spouse’s record, a restricted application for spousal benefits can be submitted online at www.ssa.gov. If you are filing on a divorced spouse’s or deceased spouse’s record, you will need to apply in person at the SSA office. If divorced, you will need to take a copy of your marriage certificate and divorce decree. If your spouse is deceased, you should also take a copy of your marriage certificate and the death certificate.
If you can file online, I strongly suggest you do so since it’s relatively easy. However, if you file online, there is no question that asks if you are filing a restricted application. To do this, you will need to answer yes to the following question:
"If you are eligible for both your retirement benefit and your spouse’s benefit, do you want to delay receipt of retirement benefit? If you are full retirement age and we determine that you are eligible to receive both a retirement benefit and a spouse’s benefit, you may choose to delay receiving your own retirement benefit and receive only the spouse’s benefit for now."
At the end of your online application, there will be a comments section where you can also enter, “I am filing a restricted application for spousal benefits only and wish to delay receipt of benefits on my own record.” This confirms to the SSA that you know what you are doing and truly want spousal benefits only. (For related reading, see: Tips on Delaying Social Security Benefits.)
Don’t be Surprised if You Receive a Letter from the SSA
Often when people file for SSA benefits and the application will not provide the maximum benefit the filer is entitled to at that time, the SSA sends a letter to the applicant. The letter tells the applicant that if they switch to benefits on their own record, they will be entitled to more. You obviously already know this and intentionally filed for reduced spousal benefits, allowing you to let your own benefits grow at 8% per year. However, the letter from the SSA can be confusing, so don’t let it change your intentional filing strategy.
The Bipartisan Budget Act of 2015 changed the rules for filing Social Security benefits, thus this technique is only available to people born before January 2, 1954. People born after that can’t take advantage of the restricted application strategy, but for those who can, it's important to be aware of this filing strategy.
(For more from this author, see: 3 Common Social Security Questions Answered.)
Disclaimer: Securities offered through Triad Advisors, LLC. Member FINRA/SIPC. Advisory services offered through Meld Financial, Inc. Triad Advisors and Meld Financial are not affiliated.