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This week’s question comes from Otto:
I am 70 years old and started collecting Social Security at 65. My wife is 65 years old and also worked all her life. My wife was told when she turns 66, she can collect half of my Social Security and let her benefit grow till she reaches 70, and then switch to her own benefit. Is this true?
Using the ‘restricted application’ strategy
Yes, it is true, Otto. A key factor is that your wife was born prior to Jan. 2, 1954. She can claim a spousal benefit as soon as she turns 66 (her full retirement age) and then switch to her own retirement benefit at 70 (or earlier if she wishes).
This claiming strategy is often referred to as a “restricted application” for benefits: The Social Security benefit application is restricted to spousal benefits only, allowing retirement benefits to continue to grow.
Those born on or after Jan. 2, 1954, are out of luck. Legislation passed in 2015 created this arbitrary dividing line between those who may qualify for this strategy and those who cannot.
Notably, the restricted application strategy is also available to those who are divorced and not remarried. A key requirement here is that the previous marriage lasted at least 10 years.
In connection with the restricted application strategy, those who are divorced have an important advantage over those who are presently married. For a married person looking to use the restricted application strategy, their spouse must also be receiving their own benefits.
In sharp contrast, for a divorced person seeking to apply the restricted application strategy, their ex-spouse need not be receiving their own retirement benefits. However the ex-spouse must be at least 62 years of age.
3 words you should never utter
The restricted application strategy bears some resemblance to the “file-and-suspend” strategy, which was eliminated as of April 2016.
Under file-and-suspend, one spouse could file for benefits and suspend receiving them (allowing them to continue growing) so that the other spouse could claim spousal benefits.
By contrast, under the restricted application strategy, one spouse files but does not suspend, thereby allowing the other spouse to claim spousal benefits.
I mention file-and-suspend because many people use that terminology when they are actually using a restricted application approach. If you mention file-and-suspend, rather than restricted application, to a Social Security Administration representative, they will almost surely tell you that file-and-suspend no longer exists, so you cannot employ the strategy you are trying to implement. You are then in for a big fight because you failed to use the correct terminology.
My advice is to never mention “file-and-suspend” to an SSA representative or on a benefit application if you are doing it online.
Even if you use the correct terminology, many SSA agents will not recognize what you are talking about. So, we always recommend to clients that they print out a key page from the SSA website and have it available when attempting to use the restricted application strategy.
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The questions I’m likeliest to answer are those that will interest other readers. So, it’s better not to ask for super-specific advice that applies only to you.
I hold a doctorate in economics from the University of Wisconsin and taught economics at the University of Delaware for many years. In 2009, I co-founded SocialSecurityChoices.com, an internet company that provides advice on Social Security claiming decisions. You can learn more about that by clicking here.
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Disclaimer: We strive to provide accurate information with regard to the subject matter covered. It is offered with the understanding that we are not offering legal, accounting, investment or other professional advice or services, and that the SSA alone makes all final determinations on your eligibility for benefits and the benefit amounts. Our advice on claiming strategies does not comprise a comprehensive financial plan. You should consult with your financial adviser regarding your individual situation.
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