Your
self-discipline in not uttering three little words helps determine whether you
can use a key claiming strategy.
Russell Settle • December
12, 2019 Master1305 / Shutterstock.com
Welcome to “Social
Security Q&A.” You ask a Social Security question, and our guest expert
provides the answer.
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your lifetime.
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 (SSA) 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.
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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.
About me
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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