Social Security Restricted Filing

Born on or Before January 1, 1954? You May Be Able to Benefit From Social Security’s Restricted Filing

You’ll want to read this if you were born on or before January 1, 1954.

Before 2016, married couples could maximize their benefits using “file and suspend.” With this approach, after one spouse claimed their benefit, the other spouse could claim one-half of their spouse’s full retirement age (FRA) benefit while simultaneously accruing delayed retirement credits on their own Social Security record. Simply put, it allowed both spouses to accrue delayed credits while one received Social Security spousal benefits.

A law that was passed in 2015 did away with this strategy. However, another approach known as restricted filing remains, though it is available only to those born on or before January 1, 1954.

What is Social Security Restricted Filing?

Restricted Filing allows you to collect a spousal benefit if you have reached FRA and still earn delayed retirement credits, but only if your spouse is also collecting their benefit.

The major advantage of doing a restricted filing is to allow the spouse who delayed their benefits to increase them by up to 32% if they wait until age 70 to file.

This strategy will also produce the highest possible survivor benefit to the spouse who outlives the other spouse.

How to See If You Qualify for Restricted Filing

Here are the main rules for Restricted Filing:

1. You must have been born on or before January 1, 1954.
2. You must be the current or former spouse.
3. You must have reached FRA.
4. You must be eligible to receive your retirement benefit.
5. Your spouse must be receiving their benefit.

If you’re an ex-spouse, you don’t have to wait until your former spouse collects their benefit to do this. As long as you were married to them for at least ten years and have been divorced for at least two years, you can file a restricted application for spousal benefits as long as you have not remarried.

Even if you qualify for restricted filing, you may only be eligible for a reduced spousal benefit. This may be the case if, among other circumstances, your spouse has chosen to suspend their benefit.

When Should I File If I Qualify?

Every year, if you don’t take advantage of Restricted Filing, you miss out on receiving spousal benefits. If you qualify, you generally should apply as soon as possible.

However, there may be better ways to optimize your Social Security benefits. One of the challenges with making decisions regarding your benefits is that, in most cases, once you’ve made up your mind, there are no do-overs, and you must live with the results of your choices for the rest of your life!

The permanency of Social Security choices is another important reason for developing a comprehensive retirement plan with an experienced financial advisor. If you’re wondering whether doing a restricted filing is a good idea, consider getting a second opinion before committing to it. Talk with one of our advisors at no cost and with no obligation by clicking here.