• Chris Stein, CFP®

Spousal Benefits and The Restricted Application Strategy

Not surprisingly, following the rule changes of a few months ago, we have received several questions like this one regarding Spousal Benefits and the Restricted Application strategy.  This question came in from one of our blog readers.  If you have a question, feel free to contact us.  Our reader asks;

“I was born in 1946 and started receiving SS benefits when I became 66 (my full retirement age).  My wife was born in 1950 and will turn 66 this December.  Can she claim 50% of what I am receiving until she is 70 and then switch over to her benefit at 70, which will be 132% of her age 66 benefit?  Please answer and provide rationale.”

Own Benefit or Restricted Application

Once your wife reached her full retirement age in December she will have the ability to file for her own benefit, OR file a restricted application for just her spousal benefit under your work record.  She has the second option because she was “grandfathered” into the ability to file a restricted application since she was at least 62 on January 1st, 2016 (she was 65).  If you were younger than 62 as of January 1st, 2016 you lose the right to file a restricted application.  Good news here…she qualifies to do what you ask.

She will not technically be entitled to receive 50% of what you are receiving, but rather 50% of your age 66 benefit (your PIA).  Since your benefit and hers are increased by cost of living adjustments, she will receive benefit of any COLAs since the year you turned 66.

When she switches to her own benefit at age 70 it will be 32% larger than the benefit she would have received at her age 66 due to delayed retirement credits.  This will also be adjusted for any cost of living increases that happen between now and then.

Thanks to our reader for sending in this question.  Many people are being affected by the new Social Security rules.  In this case it appears to be good news that the strategy you want is still available, even though it is not available to others in the future.

For more information please use the play button below to listen to our audio post.


Podcast: Play in new window | Download

Subscribe: Android | RSS

2 views0 comments

Jim's best friend Mosby

  • Facebook
  • Twitter

Check out the background of firms and investment professionals on FINRA’s BrokerCheck.

Jim Saulnier and Associates | 970-530-0556 | 506 East Mulberry Street, Fort Collins, Colorado 80524
© 2020 Jim Saulnier, LLC. All rights reserved.

Ed Slott Advisor recognition requires an advisor to be well versed on the rules and regulations regarding IRAs.
The advisor must attend two live training sessions and pass two written exams annually to remain in the program.

Jim Saulnier, Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC to residents of: CO, IA, IN, MA, NY, TN, TX, WI and WY. No offers may be made to or accepted from any resident outside the specific states mentioned. Jim Saulnier, Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Financial Planning services offered through Jim Saulnier and Associates, LLC., a Registered Investment Advisor. Cambridge and Jim Saulnier & Associates, LLC are not affiliated.