Spousal Benefit Provision
(Must qualify under the Tier 1 or Tier 2 new rules and regulations – must be age 66 prior to April 30, 2016 or must have turned age 62 by December 31, 2015)
One of the most common strategies used by married Social Security retirees is the Restricted Application for Spousal Benefit strategy. This strategy allows a qualified retiree to share the Social Security benefits (up to 50%) of their legal married spouse or former spouse without reducing the benefits of their spouse or former spouse.
The goal for the Restricted Application for Spousal Only benefits is to bridge the gap for the higher earning spouse while their benefits increase by the Delayed Retirement Credit or increase the benefits to the lower earning spouse while their benefit increases for the same reason.
John and Janis are married, each age 66 and eligible for their own Social Security benefit. John’s monthly benefit at Full Retirement Age is $2,400 and Janis’s is $800. John Files and Suspends his benefits thus allowing his benefit to increase to $3,168 at age 70. Janis files a Restricted Application for Spousal Only benefits on John’s work history and receives ½ of John’s benefit at Full Retirement Age of $1,200 (1/2 of $2,400).
Same facts as above, Janis files for her benefits of $800 and John files a Restricted Application for Spousal Only benefits on Janis’s and receives ½ of Janis’s benefit at Full Retirement Age of $400 (1/2 of $800). John collects $400 per while his own benefit increases to $3,168 at age 70
This is a very effective strategy used to maximize your combined Social Security benefit with your spouse.