Washington, DC - Social Security Matters by AMAC’s Certified Social Security Advisor C.J. Miles, Association of Mature American Citizens:
QUESTION: I just turned 66 this month and my wife is going to be 63 in April. After looking into Social Security filing options, we kept hearing about “file and suspend” and thought this would be a great option for us. We waited until I reached full retirement age to do this to make sure we would qualify. So I went ahead and applied using file and suspend. When the application was processed, my wife applied for her spousal benefit. But Social Security said no to her saying she needs to get her own benefit and she can’t get the spousal benefit. They said she has to apply for her own benefit first. Did we do something wrong?
ANSWER: One of the most popular maximizing strategies that people like to talk about is “file and suspend.” Unfortunately, the complex rules of Social Security don’t allow this opportunity for everyone – even if they are full retirement age. So when the Social Security Administration (SSA) said that your wife has to file for her benefit first, they were correct. It basically comes down to which benefit is larger.
In general, what happens is that the SSA looks at both benefit amounts (spousal and her own) and whichever amount is higher is the amount that will be paid. For example, you said you are 66 and she is 63. Let’s say your primary insurance amount (PIA), which is the benefit amount that the SSA estimates you will receive at full retirement age, is $1,500. Even though your wife is 63, the SSA will have an estimated PIA for her – let’s say that amount is $1,200. At the age of 63, your wife’s spousal benefit would be $562.50/month ($1,500 x 50% = $750 x 75% = $562.50). At the same age, your wife’s benefit on her own record would be $960/month ($1,200 x 80%). Therefore, the SSA will see that your wife’s benefit on her own record is higher and pay that amount instead of the spousal benefit.
The reason for the file and suspend option is for spouses who have little or no benefit on their own record. However, this does not mean you do not have other options available to you. For example, you can file a restricted application. This option is also only available if you are full retirement age, which you are. In this situation, you would be the one getting a spousal benefit. However, the restricted application option would allow you to receive ONLY the spousal benefit, regardless of which benefit is higher (yours or spousal) and let your own benefit grow and earn delayed retirement credits. There is a catch, though. Just like with file and suspend, the “insured” (your wife) has to file for her benefit first. So using the above amounts ($1,500 PIA for you/$1,200 PIA for her), what exactly does this mean? Your wife files for her own benefit and receives $960/month. You file a restricted application and receive a spousal benefit of $600/month ($1,200 x 50%). When you are ready (up to age 70), you can reinstate your own benefit and earn delayed retirement credits, which would be, in this example, $1,980/month ($1,500 x 132%) plus cost-of-living increases.
Also keep in mind that since you already tried to file and suspend, you would have to withdraw your previous application in order to file a restricted application. Typically this would require paying back any previous benefits, but you have not received any yet, so you would not have to worry about that. Just be careful when filing a new application that the decision is exactly what you want and is applicable to all the rules – even the fine print.
There are actually a lot of options for people – everyone just needs to understand that the various options do not work for every situation.
To ask a question about Social Security contact AMAC’s C.J. Miles at This email address is being protected from spambots. You need JavaScript enabled to view it..
