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A Social Security Hat Trick for $24,000

hat trickDid you know that even with the new Social Security rules, it’s possible to work out a strategy to maximize your Social Security benefits? There are options still available (if you were born before 1954) that can provide you with some vestiges of the old “get some now, get more later” option.

Since the restricted application option is still open for those born on or before January 1, 1954, a married couple can still work this strategy to their advantage to maximize benefits.

Here’s how it works:

Jessica and Robert are both age 66 this year. Robert’s Primary Insurance Amount, or PIA, is $1,000 per month. This is the amount of benefits he’d receive if he files for his Social Security benefit upon reaching age 66. Jessica’s PIA is $2,600 per month.

Robert files for his benefit when he turns 66 in June. Jessica reaches age 66 on her birthday in August. At that time, since Robert has filed for his Social Security benefit, Jessica is eligible to file a restricted application for spousal benefits, receiving $500 per month, 50% of Robert’s PIA. So Robert and Jessica are receiving a total of $1,500 per month at this point, and they continue to do so for the next four years.

When Jessica reaches age 70, her Social Security benefit has maximized due to the earned delay credits. When she files, she’s eligible for $3,432 per month, a 32% increase from her PIA. At the same time, now that Jessica has filed, Robert is eligible for a spousal benefit based on Jessica’s record. This means that Robert can file for the spousal “excess” benefit – which is calculated as:

50% of Jessica’s PIA ($1,300) minus Robert’s PIA ($1,000) = $300

This $300 is then added to Robert’s current benefit, and he now can receive a monthly benefit of $1,300. So together, Robert and Jessica will now receive a total of $4,732 per month.

Regardless of which of the two dies first, the smaller benefit (Robert’s) will cease, and the larger benefit (Jessica’s) will continue. So the benefit that was maximized by delaying will be paid out for the longest period of time – to the death of the second-to-die of the couple.

While maximizing the larger benefit, Robert and Jessica were able to receive four years’ worth of benefits at $1,500 per month. Then upon maximizing Jessica’s benefit, Robert received a step-up for spousal excess benefits. This strategy results in $24,000 more benefits for the couple.


  1. John DaytonNo Gravatar says:

    Finally and example that fits my situation. My wife turned 66 (FRA) August 2016 with a PIA of $1288 but didn’t file for her monthly benefit until January 2017 which is $1330. I turn 66 (FRA) this March 2017. My PIA is $2168. My intent is to restricted file for spousal benefit which I understand will be 50% of my wife’s PIA or $644, and let my benefit earn delayed credits until I turn 70. My question is how do I file the restricted application for spousal benefit only? If I start the application online there is a message that says the date I start the application may be used until July as the application date. I am now concerned that if I fill out the application before I turn 66 I will be deemed to be filing prior to my FRA. Some information on How To File a Restricted Application with specifics on what to enter and what dates to avoid would be extremely helpful.

  2. Sue CrumleyNo Gravatar says:

    I turn FRA (66) on April 26, 2017. lady at SS office yesterday told me I could file early for my benefits before end of Dec 2016 and reduction would be “only” $52 per month. Her point was to start taking 4 months early would garner around 9K for Jan/Feb/march/April. She seemed to think that would make a lot of sense and provide a lump sum up front that would take a long time to offset if I waited until my actual birthday.
    I told her I wanted to think about it. Your Thoughts?

    1. jblankenshipNo Gravatar says:

      $52 per month is $624 per year. If you live to the “average” around age 82, this means you’ll be giving up $9,984 in total benefits (no inflation calculated in). Of course if you live longer, say to age 90, the reduction amounts to $14,976 in total.

      It’s your call – is $9k now better than $14k later?

      1. Sue CrumleyNo Gravatar says:

        I think I will live to 90 and wait for the long term benefit. :). I am not in dire straights.
        Thank you for reply and confirmation.

  3. susan DouglasNo Gravatar says:

    my husband will turn 66 in February 2017 (birth year 51)with a $2200 payment and is thinking about doing a Restricted Application and then not taking his own benefits until 70. I will turn 62 in 2018 would I then apply for spousal benefits and suspend my own ss payment of $882 increasing my own benefit to $1300 at age 70.Or does he need to be receiving his benefits before I can claim spousal benefits. Is it possible for me to take spousal benefits and him to claim his own benefits at the same time while my account grows and then we both claim our own benefit when I reach 70?

    1. jblankenshipNo Gravatar says:

      You will not be eligible to receive spousal benefits based on your husband’s record while his is suspended, for two reasons: 1) you were born in 1956 (must have been born in 1953 or earlier to file a restricted application); and 2) a restricted application is only allowed after you’ve reached Full Retirement Age (66 years and 4 months for you).

      In your circumstances your husband doesn’t need to do anything to delay his benefit to age 70. However, if you choose to take your reduced benefit at your age 62, he could then file a restricted application (he was born before 1954 and he’s over Full Retirement Age) to receive 50% of your benefit while he continues to delay his own benefit to his age 70. Then at his age 70 when he files for his own benefit, you could file for the spousal benefit and likely receive a small increase from that. (I wrote “likely” because I don’t have all of your figures to work with, but used what you provided to come up with an estimate.)

  4. Allan MillerNo Gravatar says:

    Since Robert filed in June when he reached at age 66, to receive the “excess” benefit, does he need to file again or does SSA calculate automatically?

    1. jblankenshipNo Gravatar says:

      Yes, Robert would need to file for the excess benefit because deemed filing doesn’t apply to him. If he was born after January 1, 1954 the excess would automatically start for him.

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