Social Security Restriced Application
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My wife turns 66 soon and will apply for her Social Security. I’m 67 and waiting until I’m 70 so that both me and my wife can claim my higher Social Security amount. I recently found out that I can claim a restricted application for a spousal benefit to collect half of my wife’s Social Security. This will allow me to collect half of hers while my Social Security will still increase until i’m 70. Then when I reach 70 both my wife and I can claim on my increased Social Security. Does anybody know of a problem with this plan? Is this the best way to maximize our retirement income stream?
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Are you still working? If not, I don’t know why you don’t start collecting your SS now. The higher benefit is an actuary adjustment. Chances are it won’t mean more money over the long term. If you don’t need the money now, put those three years of payments in a savings account. It can add up.
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Delayed SS increases @ 8%. Try to get that at a bank. Plus the increased SS payments will (maybe) also be increased by cost of living adjustments. The larger SS payment will have a larger cost of living adjustment due to the larger amount of the payment. Plus I am also dribbling out IRA funds to rollover into a Roth account. Adding SS funds now would push those IRA funds into a higher tax bracket. For a few years now I have be rolling over just enough IRA money to max out my standard deduction. That allows me to roll those IRA funds over tax free.
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claim as early as possible, or delay
the total collected will likely be the same.
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Delaying also ensures higher survivor’s benefits.
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@redmed said in Social Security Restriced Application:
Then when I reach 70 both my wife and I can claim on my increased Social Security.
Your plan appears to be well thought out. We’re not near the age to collect yet (54), but have given the issue some thought from time to time. The elimination of file and suspend changed our tentative plan to something similar to yours, but I hadn’t realized that if I claimed at my FRA, my husband could collect a spousal benefit until he decides to collect on his record, when I would switch to the higher spousal benefit. I thank you heartily for bringing this to my attention.
Until they change the rules again, which I’m fairly certain will happen between now and when we’re eligible to claim. 
Just so you know, the maximum spousal benefit your wife will get is half of the benefit you’d get at your FRA of 66. Delaying to 70 will still benefit you, but it won’t increase her spousal benefit beyond that.
“The maximum benefit for the spouse is 50% of the benefit the worker would receive at full retirement age.”
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SS benefits are actuarially equivalent, regardless of the age they begin. I.e., if your age at death is estimated to be 84, then whether you start at 62, 66, or 70 makes no difference, the total amount received is the same. If you end up living less than that, you’re better off taking benefits earlier. If you live longer, you’re better off waiting until 70.
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@gwraigty said in Social Security Restriced Application:
Just so you know, the maximum spousal benefit your wife will get is half of the benefit you’d get at your FRA of 66. Delaying to 70 will still benefit you, but it won’t increase her spousal benefit beyond that.
“The maximum benefit for the spouse is 50% of the benefit the worker would receive at full retirement age.”
This only applies if the spouse is still alive, no? My understanding is that a surviving widow is entitled to her deceased spouse’s full benefit, even the higher amount if husband waited until 70.
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@uncamikey said in Social Security Restriced Application:
This only applies if the spouse is still alive, no? My understanding is that a surviving widow is entitled to her deceased spouse’s full benefit, even the higher amount if husband waited until 70.
Yes, your understanding is right. They make it complicated, don’t they?
I was thinking of a scenario where - happily - all goes well for the OP and his wife and both are still alive when he claims at 70. She won’t get half of his monthly benefit. She’ll get half of what he would have gotten if he’d claimed at 67. For some reason, they don’t reward the spousal benefit with the same increase as the beneficiary gets for waiting until 70 to claim. It’s still a benefit to wait as the monthly cash flow will still be higher, as long as the money isn’t needed now.
In a scenario where someone dies before they claimed, it gets more complicated with regard to the survivor benefits.
https://www.ssa.gov/planners/survivors/ifyou5.html
Basically, if the worker dies at an age where they would have been eligible to collect (62+), but hadn’t claimed yet, the survivor benefit is based on what the worker would have gotten if they’d claimed the day they died. It’s also based on when the survivor claims to get the benefits. If the survivor waits until their full retirement age, the benefit will be 100% of what the deceased worker would have gotten. If the survivor claims earlier, the benefit will be reduced. Survivors can claim as early as age 60.
If the worker dies before reaching 62, the survivor benefit is based on what the worker would have gotten at full retirement age. The same conditions apply as to when the survivor chooses to claim.
Of course, it gets more complicated when benefits for minor children are involved, but those are the basics.
My husband’s Social Security statement says that if he were to die this year (at 54), I’d get about 94% of the amount he’d be eligible for at his FRA of 67, if I waited until my FRA of 67 to apply. The slight reduction is probably because I’m 5 months older than him. If I waited until his FRA, that probably goes up to 100%.
So if the higher paid worker is younger than the lower/non-paid worker, that has to be taken into account, too. In any case, the survivor will still get a higher benefit if the higher paid worker waits as long as possible to collect.
This article explains better how it would work:
"Neither of You Had Started Benefits
If neither of you had started benefits yet, and you wait until your survivor full retirement age (likely your age 66 or 67) or older to apply for your widow/widower benefits, you will receive 100 percent of your deceased spouse’s basic benefit amount. It means if they were eligible to get $1,650 a month at their full retirement age, you would get $1,650 a month by waiting until your full retirement age to file.
Survivor’s benefits include the effect of delayed retirement credits. It means if a deceased spouse was already past age 66 or 67 and had not started taking Social Security (they can delay until their age 70), it may result in a higher survivor benefit for you than if they had filed earlier. You can get what the would have gotten at that later age."
https://www.thebalance.com/social-security-survivor-benefits-for-a-spouse-2388918
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@gwraigty I get a headache every time I look into SS rules and regulations.
I am past FRA but am waiting until 70 to take SS. My wife is younger than I am so should receive the benefit of my delay.
This seemed clear enough until I looked at my most recent SS statement. On p.2, the top line gives my SS payment if I claimed right now. Further down that section, under “Survivors”, it gives my spouse’s benefit if she waits until FRA. That spousal benefit is about 15% less than my current payment. Any idea why?
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@uncamikey I’ll attempt to answer my own question here. Looking at old SS statements and such, it appears that the spousal survivor benefit numbers assume both spouses claiming at FRA. SS does not adjust this number for delaying SS past FRA.
I think this explains it, but only SS knows for sure. I may have to call them sometime.
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@UncaMikey I’ve been thinking about this for the past few minutes, but couldn’t come up with an answer. You might have nailed it. It makes no sense that they wouldn’t adjust the number for delaying.
At any rate, if you had been collecting the benefit amount on that statement, that’s what she’d get as a survivor benefit if she waited until her FRA to collect, otherwise it’d be reduced.
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I’m glad you figured it out, but here’s my reasoning:
Let’s say one is not working at 67. They can collect $1,000 a month in SS now, or collect $1,250 a month if they wait until 70 (I’m just rough estimating for the sake of making an example). If they start now, they’ll collect $36,000 for those three years that they can save and/or pay expenses. If they wait until 70 to collect $1,250 a month, if my math is right, it will take 144 months for them to break even (collect the $36,000 of benefits they delayed). That’s 12 years. The 70 year old would have to wait until they’re 82 to break even. This is why I wouldn’t delay collecting if I was in the same position.
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@gwraigty said in Social Security Restriced Application:
Your plan appears to be well thought out. We’re not near the age to collect yet (54), but have given the issue some thought from time to time. The elimination of file and suspend changed our tentative plan to something similar to yours, but I hadn’t realized that if I claimed at my FRA, my husband could collect a spousal benefit until he decides to collect on his record, when I would switch to the higher spousal benefit. I thank you heartily for bringing this to my attention. Until they change the rules again, which I’m fairly certain will happen between now and when we’re eligible to claim.
Well, it seems I’m mistaken. This won’t be an option for us. Your birth date to qualify for this strategy has to be on or before January 2, 1954.
"If you were born on or before January 1, 1954, are currently married, or are divorced and eligible for a benefit on an ex-spouse’s record, once you reach full retirement age (assuming you have NOT yet claimed your benefits) you can use a restricted application to claim a spousal benefit, while letting your own benefit continue to grow.
You could then switch to your own higher benefit amount when you reach age 70.
If you were born on or after January 2, 1954 a restricted application may not be used for the purpose of claiming a spousal or ex-spousal benefit - however widows and widowers may continue to use a restricted application at any claiming age."
https://www.thebalance.com/social-security-rules-for-restricted-applications-2388915
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@uncamikey said in Social Security Restriced Application:
SS benefits are actuarially equivalent, regardless of the age they begin. I.e., if your age at death is estimated to be 84, then whether you start at 62, 66, or 70 makes no difference, the total amount received is the same. If you end up living less than that, you’re better off taking benefits earlier. If you live longer, you’re better off waiting until 70.
Did you read that in a government publication?
I have ran quite a few spreadsheets and if we start collecting when my wife turns 66 and I wait to collect my full amount at 70 we will reach parity at at age 75 years and 7 months of age. So I am only behind 9 years and 1 month after that I pull ahead by $469 a month or $5628 a year. Worth waiting for. Plus the added tax benefit of my IRA withdrawals from less income from SS keep that IRA money in a lower tax bracket for nine years.
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@redmed said in Social Security Restriced Application:
Did you read that in a government publication?
No, but there is a lot of research available online about this issue. Google “social security benefits actuarially equivalent” and you’ll get lots of hits. Here’s a pertinent one:
“Social Security benefits are designed to be actuarially equivalent for someone with average mortality. Theoretically, it should not make a difference when an individual starts collecting benefits. However, external factors may affect the actual amount of benefits received. These factors include (1) inflation as measured by annual cost-of-living increases, (2) the time value of money of taking benefits early and investing that amount, and (3) taxes.”
When to Start Collecting Social Security Benefits: A Break-Even Analysis
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@uncamikey said in Social Security Restriced Application:
Social Security benefits are designed to be actuarially equivalent for someone with average mortality.
The SS benefits are based on individual mortality rates. This thread is about couples claiming benefits based on their joint mortality rate. That’s what makes the OP’s strategy successful.
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I started collecting the very first possible day I could, before they up the age rules.
I’m quite pleased to get the amount I do, and I don’t want to chance a change, or poor health later on and not get the benefits I paid in for so long.
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Just so you know, the maximum spousal benefit your wife will get is half of the benefit you’d get at your FRA of 66. Delaying to 70 will still benefit you, but it won’t increase her spousal benefit beyond that.
“The maximum benefit for the spouse is 50% of the benefit the worker would receive at full retirement age.”
Thanks for that info.
I did not know that and will have to adjust my figures in my spreadsheets. This probably will not affect my choice to wait till 70 though. The main reason I’m waiting till 70 is that my wife’s family has a tendency to be long lived. Most of her relatives have and are living past the 100 year mark.
