On April 30th, 2016, the Social Security Administration ended the popular claiming technique known as “file and suspend,” which allowed couples to increase their lifetime benefits. Even though this strategy is no longer available, a second strategy, the “restricted application,” is still available to people born before January 1, 1954.
What is the “Restricted Application”?
While “file and suspend” is gone, there is another strategy that is available for couples born before 1954. The restricted application, or “free spousal benefit,” works when one spouse elects to receive their social security benefit at full retirement age. The other spouse can then elect to receive their spousal benefit rather than their own benefit. This allows the spouse (or ex-spouse) to collect up to half of their spouse’s Social Security income while their own benefit continues to grow until age 70 at 8%. Once the spouse turns 70, they then have the ability to switch to their own larger benefit.
There are a few caveats that go with the restricted application. The first is that this strategy is only available if you were born before January 1, 1954. However, it is available to widows and widowers, regardless of when they were born. Secondly, it requires that one spouse is receiving their benefit at full retirement age. Spousal benefits will stop if the primary beneficiary is no longer receiving their benefits. If you take your early retirement benefit, at age 62, you are unable to take a spousal benefit without taking your own, and will be stuck with a permanently lower benefit.
Every individual’s situation will be unique and you should talk with your financial advisor or a social security specialist to learn if using the restricted application would be beneficial to you. Deciding to file a restricted application could be a smart move, but it will depend on your current income needs, health, and family situation.