Spouses who are turning full retirement age in the year 2019 are the last group who can choose whether to take Social Security spousal benefits or to take retirement benefits on their own work record. This strategy, used in the past by some couples to help maximize their retirement benefit payouts, will not be available to people who reach full retirement age after 2019.
The ‘Claim Now, Claim More Later’ Strategy
This claiming strategy – sometimes known as “Claim Now, Claim More Later” – allows a higher-earning spouse to claim a spousal benefit at full retirement age by filing a restricted application for benefits. While receiving the spousal benefit, the higher-earning spouse’s regular retirement benefit amount continues to increase. Then, at age 70, the higher-earning spouse can claim the maximum amount of their own retirement benefit and stop receiving the spousal benefit.
To use this strategy, the lower-earning spouse must also be collecting Social Security benefits. Workers cannot claim spousal benefits unless their spouses are also claiming benefits.
If You Reached Age 62 or Older by the End of 2015
A 2015 budget law began phasing out this strategy. However, if you were 62 or older by the end of 2015, you are still able to choose which benefit you want at your full retirement age, or FRA. (Calculate your full retirement age using the Social Security Administration online calculator, or read more below.)
You do not have to make the election in the year you reach your full retirement age. If your spouse is still working, you can wait to collect monthly benefits until your spouse begins collecting.
For example, if your spouse does not begin collecting their Social Security retirement benefits until you are age 68, you can wait to collect benefits and file a restricted application at age 68.
If You Were Not at Least 62 Years Old by the End of 2015
However, when workers who were not 62 by the end of 2015 apply for spousal benefits, the Social Security Administration will assume it is also an application for benefits on the worker's record. The worker is eligible for the higher benefit, but they can't choose to take just the spousal benefits while allowing their own benefits to keep increasing until they reach age 70.
Note that the budget law’s phase-out of the claiming strategy does not apply to survivor benefits. Surviving spouses will still be able to choose to take survivor benefits first and then switch to retirement benefits later if the retirement benefit is more sizable.
More Information on Full Retirement Age
Full retirement age is the age at which individuals can start receiving full Social Security benefits, without any reduction for early retirement. For those born between 1943 and 1954, the full retirement age is 66. It gradually increases for those born after 1954, reaching 67 for those born in 1960 or later.
If individuals choose to start receiving benefits before reaching full retirement age, their benefits will be lower. On the other hand, if they delay receiving benefits past full retirement age, their benefits will increase. As shown above, understanding full retirement age is important for maximizing Social Security benefits and planning for retirement.
Consider Working With an Elder Law Attorney
The rules and regulations governing Social Security benefits can be confusing for many people. To understand your potential options as well as the laws that are currently in place, take time to consult with an elder law attorney. These professionals can point you toward useful resources, help you in financial planning for your later years, and ensure you receive the various benefits to which you are entitled.
Find a qualified elder law attorney in your area today for further guidance.
For more information on Social Security benefits, check out the following series of articles: