The File and Suspend Strategy
Prior to 2016, workers could file for benefits (making their partners eligible to claim spousal benefits), then suspend their own benefits in order to maximize their credits for deferred filing. This so-called file and suspend strategy meant that a lower-income partner could take advantage of spousal benefits while the primary earner accrued delayed retirement credits, thereby increasing their benefit amount.
However, this “have your cake and eat it, too” loophole was closed with the Bipartisan Budget Act of 2015, which took effect in .
While it is still possible to file for benefits and then suspend payments temporarily, any other benefits that would normally be available on your account (such as spousal benefits) are no longer payable during such suspensions.
Deemed Filing
Previously, it was possible for those eligible for both types of benefits to claim spousal benefits first, while delaying a claim on their own account, a process sometimes called a restricted application. This allowed taxpayers to benefit from the earlier spousal payment while maximizing their own benefits through delayed retirement credits.
Under current law, spouses born after Jan. 1, 1954, are deemed to have filed for any and all benefits for which they are eligible as soon as they file for any of them. The payments they receive are based on whichever benefit amount is the highest.
Strategies for Maximizing Spousal Benefits
The three strategies below will help you make the most of your Social Security spousal benefits, depending on your circumstances. However, keep in mind that, regardless of your circumstances, the most a spouse can get is 50% of the amount that the higher-earning partner is entitled to at full retirement age.
1. Strategy for Late Claimers
If one partner has little or no earnings history, the best strategy is for the wage earner to postpone applying for Social Security retirement benefits until age 70 to get the highest amount possible. Full retirement age is 66 for most baby boomers and 67 for everyone born in 1960 or later, but by delaying claiming benefits until age 70, the wage-earner will accrue delayed retirement credits that will increase the monthly payments by a certain percentage for each year of delay. For people born in 1943 or later, it’s 8% per year.
Keep in mind that this won’t affect the spousal benefit amount. If you delay claiming for personal retirement benefits past full retirement age, the benefit increases over time. However, that will have no impact on your spouse’s benefits, since they max out at full retirement age. In other words, there is no benefit for your spouse in delaying the spousal benefit claim past your full retirement age.
On the other hand, if both spouses work, and their earnings are more or less equal, their individual Social Security benefits will each be greater than the spousal benefit, so the best strategy for both is to postpone applying for benefits until age 70.
2. Strategy for Divorced Spouses
If you’ve been divorced for at least two years, you can apply for spousal benefits if your marriage lasted 10 or more years. Or if you are still married and are considering a divorce, and are near retirement age, try to apply for spousal benefits before your divorce is final. If you have been married and divorced multiple times, you can choose to receive whichever spousal benefit is highest.
3. Strategy for Widowed Spouses
Widows and widowers may receive full hГ¤rliga Venezuelanska damer survivors benefits at their full retirement age or reduced benefits as early as age 60. And if you remarry, you may apply for spousal benefits based on your new spouse’s record instead, depending on the circumstances.
