Under a grandfather rule, married couples who were both at least age 62 on January 1, 2016 are eligible for a procedure called a “restricted application” to increase their social security benefits. The spouses must also meet other qualifications for spousal benefits to use the procedure, which I’m not going to explain here.
The social security benefit increases by 8% each year after the individual reaches “full retirement age” until reaching age 70, usually for a total potential 32% increase. (For individuals born from 1945 to 1954, full retirement age is age 66.)
If you are trying to provide the highest possible survivor benefit, you will usually want to defer applying for benefits for the higher-earning spouse until age 70.
Lower-earning spouses can always apply for worker benefits under their own account and later apply for potentially higher spousal benefits after their higher-earning spouses apply for benefits under their own account.
When a restricted application is made, the higher-earning spouse initially applies only for spousal benefits under the lower-earning spouse’s account. Retirement credits continue to accrue on the higher-earning spouse’s account and that spouse applies for worker benefits on his or her own account at age 70.
For example, John was born on April 8, 1953. His full retirement age benefit at age 66 is $2,500 per month. Jill was born on December 30, 1952. Her full retirement age benefit at age 66 is $800 per month.
Jill applies for worker benefits at age 66 on December 30, 2018. Her benefit is $800 per month.
John makes a restricted application for spousal benefits at age 66 on April 8, 2019, for a benefit of $400 per month (disregarding cost of living adjustments for all computations.)
John applies for worker benefits on his own account at age 70 on April 8, 2023, for a benefit of $3,300 per month.
Jill applies for spousal benefits during April, 2023 for a benefit on $1,250 per month (one-half of John’s primary insurance amount of $2,500.)
You can’t apply for spousal benefits until your spouse applies for worker benefits.
When the low-income spouse applies for spousal benefits after reaching full retirement age, that spouse receives one-half of the high-income spouse’s primary insurance amount (the worker benefit that spouse would receive at full retirement age without any increases for deferred retirement credits), even if the high-income spouse hasn’t reached full retirement age, and even when the high-income spouse applies for benefits later than full retirement age.
This explanation only covers the highlights. You might want to go over your details with a financial planner who understands social security benefit planning.
Also, be extra careful when making a restricted application for benefits to avoid accidentally making a regular application.
I hope this information is helpful for you or somebody that you know. Feel free to share a link for this blog post.