Can You Still File A Restricted Application?
The Social Security Department made some sweeping changes to some of the claiming strategy rules on November 2, 2015. One of those was the use of the restricted application, or claiming spousal benefits first while allowing your own benefits to continue to grow.
The new rule only allows the use of the restricted application for those born before January 2, 1954. Basically, with the rule change for people aged 62 at the time of the change they grandfathered in the restricted application process.
What does this mean filing a restricted application? The definition of this with the Social Security Department is you are only filling for one benefit. Technically your restricting the scope of your benefits to just the spousal benefit instead all of the benefits your entitled to.
Anyone born before January 2, 1954 can still file a restricted application. By filing for the spousal benefit you can receive 50% of their benefit, and allow yours to continue to grow past your full retirement age.
A Few Rules First
- You must have reached your full retirement age to file for a restricted application.
- You must not have already filed for your own benefits.
- Your spouse must have already filed for benefits.
- In the case of an ex-spouse they just have to have reached age 62, they technically do not have to file first.
If you are a widow/widower, or survivor of a deceased ex-spouse, then you can file a restricted application even if you have not reached full retirement age and the year of birth does not matter.
So getting past all of the rule details, how can this strategy help you?
This can be a very effective strategy to allow your benefits to continue to grow. Remember benefits will grow by 8% from your full retirement age until age 70. So if you had thought of delaying benefits to increase your Social Security Income, with the Restricted Application on Spousal Benefits you can still receive some income while you delay.
Here’s an example of how this can be effective. Let’s say we have two 66 year olds and the husband’s Social Security is around $2600 a month and the wife’s is $1000. She can file hers and he would receive $500 a month as a spousal benefit and allow his to grow to over $3500 at age 70. Now when he files then her spousal benefit would be larger than her personal benefit and would jump up to $1300 a month. Note, her spousal benefit will not grow past 50% of his amount at age 66, even though he delayed benefits and received a larger amount later.