Social Security Options Remain

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In November 2015, President Obama signed into law the Bipartisan Budget Act of 2015.  One significant byproduct of the legislation is the elimination or curbing of two Social Security filing strategies that married couples may have been planning to use to optimize their lifetime Social Security benefits.  The two programs include the “File and Suspend” and “Restricted Application” for spousal benefits filings. 

Training about the new legislation was meager at its onset and just weeks before the new rules became effective, many Social Security benefits coordinators were still uninformed.  In January 2017, the Social Security manual was updated to guide benefits coordinators to better service the public and allow those born before 1954 to take advantage of the Restricted Application benefit that remains.[i] 

Expired Benefits

File and Suspend– This was when an individual, who was at least at Full Retirement Age (age 66 for most claimants), filed for his or her own retirement benefit and then immediately suspended receipt of those benefits with the Social Security office.  This allowed a spouse or dependent to collect benefit payments based upon the original filer’s record, without affecting their own benefits. 

Under the Bipartisan Budget Act, as of May 1, 2016, no future claimants were allowed to access this benefit.  Those already using the strategy were grandfathered under the old rules.

Limited Benefit Remaining

Restricted Application – When an individual is at least Full Retirement Age (FRA), has not filed for any previous benefits, and has a spouse who is collecting Social Security benefits, they may file a Restricted Application (RA) to receive ONLY the spousal benefit based upon the spouse’s record.  Collection of Social Security benefits under the Restricted Application does not affect the individuals’ own pool of benefits. 

This strategy allows a person to collect spousal benefits and concurrently delay their own future retirement benefit so it may grow 8% per year.  Upon reaching age 70, the Restricted Application filer would switch from the spousal benefit income to their own Social Security benefit. This strategy increases the filers benefit to be 32% greater than if they had simply collected their own benefit at age 66.  For example, say you were eligible to collect $1,360/mo. of benefits at age 66.  By employing the RA strategy and deferring collection to age 70, your monthly benefit would increase to $1,795/mo., or an additional $5,220/yr. of income.  For those dependent upon Social Security in retirement, the benefit increase can make a big difference. 

Restricted Application on Ex-Spouses – It may be possible to file a Restricted Application to claim Social Security benefits on an ex-spouse if you were married for 10 years or more and have not remarried.  Your ex-spouse does not have to file for their own Social Security benefits in order for you to file your Restricted Application, but they do have to qualify for Social Security benefits.  The maximum benefit you could receive on an ex-spouse is limited to 50% of their Social Security benefit at Full Retirement Age, regardless of when they actually claim their benefit.  Filing for RA benefit on an ex-spouse in no way affects their own pool of benefits.

Under the Bipartisan Budget Act, the Restricted Application filing is no longer available to anyone born Jan. 2, 1954, or later. However, it is still available for those born Jan. 1, 1954, or earlier who have not yet collected their Social Security benefits.  In the next two years, the last of those eligible for the Restricted Application benefit will reach Full Retirement Age and hopefully take advantage of this remaining benefit. 

Many who went to the Social Security office to claim on this benefit were initially, and incorrectly, told the Restricted Application benefit was eliminated when the File and Suspend benefit expired in May 2016.  That is not true. 

New literature and training has been conducted within the organization to help Social Security recipients claim benefits they rightfully deserve.  However, if after speaking with a Social Security representative, they give you an answer that is different than your understanding of your benefits, ask for a Tier 2 representative who might be better trained. 

Determining when and how to claim Social Security benefits has always been a challenging task. A Financial Planner can help you determine how to best align yourself and take advantage of the benefits you’ve earned.  If you are age 66 now, or will turn 66 within the next couple of years, speak with your Certified Financial Planner™ or CPA about taking advantage of these claiming strategies before you lose the option to do so.


Financial Ducks in a Row, “File & Suspend and Restricted Application are NOT Equal”

Market Watch, “Millions of Americans just lost a key Social Security strategy”

Market Watch, “New Social Security Rules Change Claiming Strategies”

U.S. News & World Report, “How the Budget Deal Changes Social Security”

Wall Street Journal “A Strategy to Maximize Social Security Benefits”


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