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Note: with the passage of the Bipartisan Budget Act of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details.
Since I’ve been receiving quite a few inquiries about certain aspects of the Spousal Benefit, I thought I’d put up an article with a few definitive statements about this confusing part of the Social Security system.
1. If you are eligible for a Spousal Benefit and you’re under Full Retirement Age, when you file for your own benefit, you are automatically filing for both your own benefit and the Spousal Benefit at the same time. This is known as the deemed filing rule.
By “eligible”, we mean that your spouse has filed for his or her benefit, or filed and suspended.
If you are in the situation above, you cannot file for your own benefit alone, you’ll have to file for both benefits at that time, and both benefits are reduced since you’re filing before Full Retirement Age.
2. The only time that you can file solely for Spousal Benefits is when you are at least at Full Retirement Age and your spouse has filed for his or her benefit (could have suspended). This is known as a restricted application for Spousal Benefits only.
3. You cannot File and Suspend and also file a restricted application for Spousal Benefits only at the same time. This doesn’t mean that one person couldn’t use both provisions at some point, or that two spouses couldn’t use these provisions at the same time – but one person can’t do both at exactly the same time.
4. Two spouses cannot File and Suspend at the same time for the reason of allowing the other spouse to file for spousal benefits. Technically they both could File and Suspend, but doing so would not allow the other to file for Spousal Benefits. There is a little-known side-benefit to the File and Suspend option that could allow you to “unsuspend” and receive all back-benefits up to that point in your life, rather than re-applying and receiving the Delay Credits. This has to be done while you’re alive, but it’s a technical option available.
5. It’s possible for both spouses to at some point each receive a Spousal Benefit – here’s example:
Dick is 66, and Jane is 62. Jane files for her reduced benefit at 62 and Dick, being at FRA, files a restricted application for Spousal Benefits and receives half of Jane’s PIA for the coming four years, until he reaches age 70. When Dick files for his own benefit, now increased by Delay Credits, Jane is eligible to file for the Spousal Benefit increase. So both eventually received the Spousal Benefit in their lifetimes.
Hope these things helped to clear things up. Let me know in the Comments if you have additional questions about Spousal Benefits.
Sterling Raskie, MSFS, CFP®, ChFC®
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In the example, when Jane files for the spousal benefit, is it reduced because she filed for her own benefit early (age 62)?
Yes, that’s correct. But also keep in mind that the example is only valid for a situation where Dick was born before 1954, thus enabling the restricted application. If he was born in 1954 or later, that example won’t work because restricted application for spousal benefits is not available.
Can two two-earner couples, buth 66 (ie at FRA) apply for each others spousal benefits by using the restricted application (each) and delay receiving their own benefits until age 70?
John – no, this cannot be done. If you review points 2 & 3, this should help to clear thing up.
jb
Jim, this is one of the best and clearest explanations I have seen for spousal benefits. Excellent job!
Spousal Benefit is becoming a little clearer but: I am 69 and began drawing benefit at 66. When my spouse reaches FRA can she draw Spousal Benefit until age 70 and THEN file for full benefit.
Yes, that strategy should work just fine, Doug.