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Can Both Spouses File a Restricted Application for Spousal Benefits Only?

Couple married in a shinto ceremony in Takayam...

Couple married in a shinto ceremony in Takayama, Gifu prefecture (Photo credit: Wikipedia)

In the wake of my post last week, Can Both Spouses File and Suspend?, I received multiple iterations of the same question, which is the topic of today’s post: Can Both Spouses File a Restricted Application for Spousal Benefits Only?

Unlike the original situation where technically it is possible to undertake but the results would not be optimal, in this situation it’s not technically possible. (The one exception is in the case of a divorced couple. For the details on how it works for divorcees, see this article: A Social Security Option Strictly for Divorced Folks.)

The way the restricted application for spousal benefits works is that there are three rules that must be met:

  1. You must be at or older than Full Retirement Age (FRA)
  2. Your spouse must have filed for his or her own retirement benefit – does not have to be actively receiving benefits, he or she could have filed and suspended
  3. You must not have filed for your own retirement benefit

As you can see, #2 & #3 cannot both be done by the same person in the couple.  It is not possible to (#2) file for your own benefit, enabling your spouse to file a restricted application and (#3) not file for your own benefit, enabling you to file a restricted application.

Therefore, only one of the members of a currently-married couple can file a restricted application for spousal benefits.

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Can Both Spouses File and Suspend?

portrait of C. A. Rosetti

portrait of C. A. Rosetti (Photo credit: Wikipedia)

This question continues to come up in my interactions with readers, so I thought I’d run through some more examples to illustrate the options and issues.  The question is:

Can both spouses file and suspend upon reaching Full Retirement Age, and collect the Spousal Benefit on the other spouse’s record, allowing our own benefit(s) to increase to age 70?

Regarding file & suspend and taking spousal benefits, although technically both of you could file and suspend at the same time, only one of you *might* receive spousal benefits at that point. The reason is that once you file (regardless of whether you suspend) the spousal benefit is then limited to the amount over and above your own Primary Insurance Amount (PIA), up to 50% of your spouse’s PIA. (Remember, PIA is the amount of benefit that you would receive at exactly Full Retirement Age.)

For example, if you and your wife have PIAs of $2000 and $800 respectively and you both file and suspend, your wife could file for spousal benefits of $200 (half of your PIA minus her PIA equals $200). However, you would not be eligible for a spousal benefit since half of your wife’s PIA minus your PIA is a negative number.

Now, if we change the numbers so that you have a PIA of $2,000 and your wife’s PIA is $1,200 and both of you file and suspend, neither of you would be eligible for a spousal benefit. Half of either of your PIA’s is less than the PIA of the other, so no spousal benefit is available if both file and suspend at the same time.

Typically this works out best if only one spouse files and suspends, usually the one with the greater PIA, and the other spouse files a restricted application for spousal benefits only. Using my first example numbers, if you filed and suspended and your wife filed a restricted application for spousal benefits only, she would be eligible for a $1,000 spousal benefit, and both of your own benefits would accrue Delayed Retirement Credits (DRCs) up to age 70. At that point, again, using the first example numbers, you would be eligible for a benefit of $2,640, and she would be eligible for a benefit of $1,056.

Another way this could be done would be for your wife (again, working with the first numbers) to file for her own benefit at Full Retirement Age, receiving $800 per month.  Then you could file a restricted application for spousal benefits only, and receive half of her PIA, or $400 per month.  You’d continue to receive this for four years until you reach age 70, at which point you would file for your own benefit, enhanced by the DRCs to $2,640.  At this point your wife could file for spousal benefits, increasing her own benefit to half of your PIA, or $1,000.  This second option actually gives you more money over the four-year span from FRA to age 70, but your wife’s benefit would be limited to a maximum of $1,000 (rather than $1,056) for her lifetime or yours, whichever is shorter.

At any rate, hopefully this resolves the question once and for all – while technically both spouses can file and suspend at the same time, there’s not a lot of reason to do so as the spousal benefits would only be available to one of them, at most.

If you have other situations that you’d like to review, leave a comment below and I’ll do my best to answer promptly.

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Important Ages for Social Security

That Certain Age

That Certain Age (Photo credit: Wikipedia)

There are many specific important ages to know as you’re planning your Social Security filing strategy. The ages can become quite confusing and jumbled together as you plan.  It’s important to know at what age you can take specific actions, as well as what the consequences can be if you take a particular action earlier than it is appropriate.

These ages are pervasive throughout this blog and my book, but I hadn’t compiled all of the important ages into a single place, so listed below are what I have determined to be the most important ages with regard to Social Security, as well as what is important about that age.  Enjoy!

Age Description
22-62 This is the forty years during which your monthly earnings are compiled to develop your initial Average Indexed Monthly Earnings (AIME).  This figure is then used to determine your Primary Insurance Amount (PIA) which is used to calculate your retirement benefit, your spouse’s and dependents’ benefits, survivor benefits for your beneficiaries, and the family maximum benefit amount.
50 The first age at which you can file for survivor’s benefits (also known as widow(er)’s benefits).  In order to file for survivor’s benefits at this age, you must be permanently disabled.  Benefits at this age will be reduced – to the same amount as if the survivor was age 60 and not disabled.
60 The first age at which you can file for survivor’s benefits if you are not disabled. (see 50 above if disabled) Survivor benefits at this age will be reduced to the minimum amount.
62 The earliest age at which you can begin receiving your own retirement benefit and spousal benefit if you are eligible.  Both benefits would be reduced if taken at this age.
62-FRA Between these ages (starting at age 62 and before reaching FRA), if you file for your own benefit and you are eligible for the spousal benefit (meaning your spouse has filed), you are deemed to have filed for both benefits.  Likewise, during this period if you file for the spousal benefit you are deemed to have filed for both benefits.Within the 3 years immediately before FRA, your benefit is reduced by 5/9% each month, or 6.667% per year. If you file more than 3 years before FRA, reduction is 5/12% per month for each month greater than 3 years before FRA, or 5% per year.
66 Full Retirement Age (FRA) for folks who were born during the years 1943 to 1954.  This is the first age when you can file for the full, unreduced retirement benefit.  You can also file a restricted application for spousal benefits only at this age – if your spouse has filed for his or her own benefit.At FRA, spousal benefits are maximized – there is no increase by delaying receipt of spousal benefits after this age.

This is also the FRA for survivor’s benefits if born between the years of 1945 and 1956.  This means you’d have no reduction to survivor benefits if you delay filing for them until this age.

66 & 2 months FRA for retirement benefits if born in 1955 (see 66 for description).  FRA for survivor benefits if born in 1957.
66 & 4 months FRA for retirement benefits if born in 1956, and FRA for survivor benefits if born in 1958.
66 & 6 months FRA for retirement benefits if born in 1957; FRA for survivor benefits if born in 1959.
66 & 8 months FRA for retirement benefits if born in 1958; FRA for survivor benefits if born in 1960.
66 & 10 months FRA for retirement benefits if born in 1959; FRA for survivor benefits if born in 1961.
67 FRA for retirement benefits if born in 1960 or later; FRA for survivor benefits if born in 1962 or later.
FRA-70 Between these ages, if you have not filed for your own benefit (or have suspended), your retirement benefit will increase by 2/3% per month, or 8% per year (12 months).
70 At this age, your delayed benefit is at its maximum level.  There are no increases by delaying receipt of benefits past this age.

If I’ve left out any important ages, let me know so that I can add them to the list.  Just leave a comment below!

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Restricted Application is Available via the Online Application

I learn something new almost every day.

Today (well, not today but recently), I learned something about the online application for Social Security that I didn’t know: the restricted application for Spousal Benefits is available as a choice when you apply using the online application system! (If you want more information on why a restricted application is important, see this article about Leaving Money on the Table.)

For quite a while now I’ve been telling folks that the best way to apply for the restricted application is to go to your local office.  When you get there and explain that you want to submit a restricted application for Spousal Benefits only, the first person that you talk to will likely tell you that you can’t do this, because your own retirement benefit is greater than half of your spouse’s PIA, or something like that.  Then my advice has been to ask for a supervisor and explain it again, and keep insisting that you’re eligible to do this (make sure that you are, first of course!), until you get the right person to agree with you.

As it turns out, for some time now you’ve been able to select this option via that online application.  See below – this is a screenshot of the application system (sorry it’s not very legible).  The last part in bold says:

If you are eligible for both retirement benefits and spouse’s benefits, do you want to delay receipt of retirement benefits?

bene app screenshot restricted app

It’s clear that this option gives you the ability to delay the receipt of your retirement benefit and only receive the spouse’s benefit, assuming that you’re at least at Full Retirement Age and your spouse has applied for his or her benefit.

This is great news – since now you won’t have to go through the hassle described above in order to submit a restricted application for spousal benefits.

An additional, likely unintended positive to this development is that you could use this blog to show the first person you talk to (if you still opt to visit the local office) in order to help prove your eligibility for this option.

Know Your Options When Talking to Social Security

Cardpunch operations at U.S. Social Security Administration

When you get ready to file for your retirement benefits, it’s important to understand what options are available to you before you talk to the Social Security Administration.  There are many ways to get a good understanding of your options, including working with your financial advisor, reading up on the subject (this blog is a good place to start!), and talking to friends and relatives who have already gone through the process.

The reason it’s important to know your options is because the Social Security Administration staff that you may encounter are not trained to help you maximize your lifetime benefits – they are trained to help you maximize the benefit that you have available to you today.  Often the options that the SSA staff present to you are not the best options for you in the long run.  In addition, SSA staff are absolutely overwhelmed by the volume of folks that they are in contact with.  As I understand it, disability claims are backlogged by as much as three years in some cases – so you can imagine how difficult it is for the staff to handle new, unusual cases.

Listed below are a few examples that I’ve heard recently where folks have gotten erroneous or incomplete responses to basic questions presented to SSA staff.  This is not intended to be an exhaustive list, just a few things I’ve heard about recently.

Restricted Application

An husband, age 66, wishes to delay his filing to age 70.  At the same time, his wife, age 62, is filing for her own benefit today.  The husband wishes to file a restricted application for spousal benefits only – which would allow him to receive a benefit equal to half of his wife’s PIA (not her reduced benefit) while he continues to delay his own benefit to age 70.  SSA staff told him that since his own benefit would be greater than half of his wife’s PIA, he would not be able to do this.

Of course, if you’ve read this blog or my book, you know that this is incorrect.  The man called me and asked about it – and I told him to go back to the SSA and make the request again, specifically requesting to file a “restricted application for spousal benefits only”.  I then recommended that if he still received a negative response to request to speak to a supervisor about it.  Eventually, with this guidance, he was able to get the benefit that he asked for.

“Bonus” Lump Sum

If you are over Full Retirement Age (age 66 these days) and you go to or call the Social Security Administration to file for retirement benefits, you may be presented with an option for a “bonus” lump sum of up to six months’ worth of benefits, to be paid to you when you receive your first check.  Don’t fall for it without knowing what’s going on!

What is happening is that the SSA staff is suggesting an option to you that is available – of retroactively applying for benefits six months prior to the actual date.  Effectively, if you are (for example) 67 years old when you take this option, you will be filing as if you are 66 years, 6 months of age.  This will reduce your Delayed Retirement Credits by that 6 months, or 4%.  You’ll end up with a lump sum check for the six months that you hadn’t received up to that point, but your future benefits will be 4% less than they would have been had you filed at your attained age of 67.

If this is what you want, then go for it – but realize that not only is your own future benefit going to be permanently reduced from what it could have been, any survivor benefits that your spouse will receive are also reduced.

Divorcee planning

A divorced person who is qualified to receive benefits based upon her ex’s work record often has difficulty in planning when to receive benefits.  This is especially troublesome if you are pretty certain that your Spousal Benefit will be significantly more than your own benefit, and you’d like to maximize that benefit.  The trouble is that you may not have access to the complete information about your ex’s benefit (and therefore, any spousal benefit you could receive).

The key to this is to have the correct documentation about your situation when you talk to Social Security.  Most often, this is going to require a visit to the local office, although I’ve been told this can be done over the phone.  I assume in a case like that there are several calls involved because you’ll have to send your documentation for the SSA to verify.

At any rate, if you have your marriage license and your divorce paperwork, which show that you were married for ten or more years and the divorce occurred more than two years ago, along with your ex’s Social Security number and date of birth, the SSA staff will be able to provide you with information about what benefits you are eligible to receive based on the ex’s record.  Without this documentation, you will be denied access to the information.

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Are You Leaving Social Security Money on the Table? You Might Be, If You Don’t Understand and Use This One Rule

A handsome couple

Many couples that have done some planning with regard to filing for Social Security retirement benefits have figured out how to coordinate between the higher wage earner’s benefit and the lower wage earner’s benefit.  Often it makes the most sense to file for the lower wage earner’s benefit early, at or sometime near age 62, while delaying the higher wage earner’s benefit out to as late as age 70.

This method allows for a maximization of those two benefits.  If you’re really astute, you probably picked up on the concept of file and suspend, as well.  File and Suspend allows for the lower wage earner to increase his or her benefits by adding the Spousal Benefit, while the higher wage earner continues to delay his or her benefit, adding the delay credits.

Another little-known method that can be employed in specific circumstances is called the Restricted Application for Spousal Benefits.  This method provides one spouse or the other with the option of collecting a Spousal Benefit, while at the same time delaying his or her own retirement benefit.

First Example

Let’s work through an example to help understand the concept.

Joe and Jane are both age 62, and they have expected retirement benefits at age 66 (also known as a Primary Insurance Amount, or PIA) of $2,000 and $1,000, respectively.  The strategy that they intend to employ is for Jane to file now, at age 62, and then Joe will delay his benefit to age 70.  By doing so, Jane’s benefit will be reduced to $750 per month; after he reaches age 70, Joe will be eligible for an increased benefit of $2,640.

The normal usage of File and Suspend won’t work in this case, since Jane’s PIA of $1,000 is equal to 50% of Joe’s PIA of $2,000.  (If you need more information on File and Suspend, see this article.)  This is where the Restricted Application can apply.

As we know from prior articles on the subject, the Spousal Benefit is available to one spouse when the other spouse has filed for his or her own benefit.  In addition, we know that filing for a Spousal Benefit prior to Full Retirement Age (FRA) invokes deemed filing, which would require that all eligible benefits are filed for at the same time.  After FRA, deemed filing does not apply.

Back to our example, when Joe reaches Full Retirement Age (FRA, age 66) he can be eligible for a Spousal Benefit based upon Jane’s record.  In order to do this and still delay his benefits, he would file a Restricted Application for Spousal Benefits Only with the SSA.  This type of application restricts the filing solely to Spousal Benefits.  Since Joe meets the qualifications for receiving a Spousal Benefit and he’s at or older than FRA, he will be eligible to receive 50% of Jane’s PIA as a Spousal Benefit, while still delaying his own benefit.  Deemed filing doesn’t apply since he’s older than FRA.

In doing this, Joe will receive $6,000 per year for four years, or $24,000 (Cost-of-Living Adjustments have been left out of our example for the sake of clarity).  If Joe didn’t know about this special rule, that’s money that he would never have received at all, money left on the table.

This method will also work if the couple are farther apart in age, and if their benefits are farther apart.

Second Example

Here’s another example:

Mike is 66 and Michelle is 62.  Michelle has a PIA or expected age 66 benefit of $1,800, and Mike has just filed for his own benefit in the amount of $800 per month.  In order for the couple to maximize Michelle’s benefit by delaying her filing to age 70, she can file the restricted application at age 66, FRA, and receive 50% of Mike’s benefit while continuing to receive the delay credits out to age 70.  When she files for her own benefit age age 70, Mike can then file for a Spousal Benefit, which would increase his own benefit by $100 for the rest of his life.  This is because 50% of Michelle’s PIA of $1,800 is $900.  Subtracting Mike’s PIA from that amount leaves $100 for Mike’s Spousal Benefit increase.

Third Example

Bob is 58 and his wife Roberta is 62.  Roberta has a PIA of $2,000, and Bob’s projected PIA is $700.  Roberta intends to delay her benefit to the maximum amount, age 70.  Bob will file for his own benefit at age 62, and as such his benefit will be reduced to $525.  At that time Roberta will be 66, and so she could file and suspend, which would provide Bob with an opportunity to increase his benefit by adding the Spousal Benefit.  If they did that, the Spousal Benefit increase would be $210 ( after reduction since he’s under FRA), bringing his total benefit to $735.  Roberta is not receiving a benefit at all at this point, she’ll receive her first benefit at age 70.

However, if at age 66 (FRA) Roberta were instead to file a restricted application for spousal benefits (instead of filing and suspending to allow Bob to file for the Spousal Benefit), the Spousal Benefit that she’d receive would be $350.  She can do this since she’s at age 66 and Bob has filed for his own benefit.  The Spousal Benefit of $350 is $140 more than the Spousal Benefit that Bob would receive under the File and Suspend strategy.  She would receive this $350 benefit until she reaches age 70 and files for her own benefit.  Then Bob could file for the Spousal Benefit at that point, increasing his overall benefit by $300, to a total benefit of $825.

If the couple didn’t use the second method, they’d be leaving $6,720 on the table, and unnecessarily leaving Bob with a lower benefit for life.

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The Restricted Application for Social Security Spousal Benefits

Restricted Area

One provision of Social Security benefits that is relatively unknown is the restricted application for Spousal Benefits.  This provision allows a person to apply for benefits based upon his or her spouse’s record while delaying receipt of benefits based upon his or her own record.

The restricted application is only available when three factors have been met:

1 – the individual filing the restricted application has reached Full Retirement Age (FRA); and

2 – the individual has not filed for his or her own Retirement Benefit; and

3 – the individual’s spouse has filed for his or her own Retirement Benefit (could have filed and suspended)

An Example

Dick and Jane are ages 62 and 66, respectively.  Dick filed for his own benefit at age 62, and Jane would like to delay her benefit to age 70, to achieve the maximum delay credits.  Since Jane is at FRA (factor 1), has not filed for her own benefit (factor 2), and Dick has filed for his own retirement benefit (factor 3), Jane is eligible to file a restricted application for Spousal Benefits only.

Since Jane is at Full Retirement Age, the Spousal Benefit that she will receive is going to be equal to 50% of Dick’s unreduced benefit.  Since Dick has filed early, he will be receiving a reduced benefit – approximately 75% of the amount he would have received at FRA.  So Jane’s ultimate Spousal Benefit in this case will be roughly 2/3 of Dick’s current benefit.

Once Jane reaches age 70, she can now file for her full benefit, with the maximum delay credits applied (32%).  Dick will be 66 at that time (or thereabouts) and so he will be eligible to apply for a spousal benefit – as long as 50% of Jane’s PIA (the amount she would have received if she filed at FRA) is greater than Dick’s PIA.  So if Dick’s PIA was $800 and Jane’s PIA was $2,000, Dick’s overall benefit could be increased by the difference, $200, at this time.  If Dick is younger than Full Retirement Age when Jane files, his Spousal increase could be reduced from that $200 offset if he files before he reaches FRA.  For more on how the reductions for Spousal Benefits works, see Social Security Spousal Benefit Calculation Before FRA.

How About Ex-Spouses?

An ex-spouse can use the restricted application as well – provided that he or she was married to the former spouse for at least 10 years and has not remarried.  One thing that’s different about a divorced person’s situation is that the ex-spouse doesn’t have to have filed (factor 3) – the ex only has to have reached age 62 and thus is eligible to file.  In addition, if the former spouse has not filed for his or her own benefit, the couple must have been divorced for at least two years when he or she files for Spousal Benefits.

If there was more than one ex-spouse who fits all of the requirements, the individual can choose the Spousal Benefit that is the largest.

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