Social Security: If You're Married, Here's How Things Have Changed


In late 2015, the budget bill Congress passed eliminated a loophole in Social Security that allowed married couples to boost their collective benefits by thousands of dollars each year using a strategy known as "file and suspend."

Unfortunately for couples who are near retirement, this strategy is disappearing after April 30.

How it worksHere's how the file-and-suspend strategy works. One retired worker, upon reaching their full retirement age, files for Social Security benefits and then immediately suspends them. This allows them to accrue delayed-retirement credits, which raise their benefits by 8% per year up until age 70. In the meantime, the beneficiary's spouse can claim spousal benefits and leave their own benefits untouched so they, too, can grow by 8% per year. Therefore both partners are earning delayed-retirement credits, even while one of them is receiving spousal benefits. Retirees who file and suspend can receive an extra $30,000 to $60,000 between the time one starts drawing spousal benefits and when they eventually start drawing their own benefits -- which will be significantly larger than they would have been if claimed earlier.

To file and suspend, you must must have reached your full retirement age, which varies based on when you were born. The spousal benefit received is one-half of the benefit amount of the spouse who suspended his or her benefit.

What makes it greatThis strategy doesn't work for everyone, but it can be a serious boon to some married couples. Allowing your benefits to grow until you reach age 70 not only maximizes your benefit, but also amplifies the effect of any future cost-of-living adjustments that the Social Security Administration makes. If the SSA increases everyone's benefits by 2% to keep up with inflation, then you'll get a bigger raise if your benefits are already maxed out. Additionally, any survivor benefits that might go to your loved ones will be based on this higher benefit level.

If that weren't enough, the partner who's receiving spousal benefits can continue to do so beyond age 70 if their ownbenefit would be lower than their current spousal benefit. Similarly, if the spouse with the higher earnings record dies first, then the surviving spouse has the option to collect the higher of his or her own benefit or the survivor benefit based on the deceased spouse's earnings record.

Who can still file and suspend?If you were born before Jan. 1, 1954, then you may still file a restricted application to receive a spousal benefit based on your spouse's earnings record, so long as he or she is drawing a benefit. Your own benefit can continue to grow until age 70 as before. You still must have reached your full retirement age to do this.

Those who are eligible to use the file-and-suspend strategy must submit their paperwork for both the file and suspend and the restricted application before April 30.

What if you can't file and suspend?After April 30, this strategy is off the table, even if you're currently eligible. If you suspend your benefits, nobody else will be allowed to draw a benefit off your earnings record. For couples, that includes spousal benefits.And if you file a restricted application for benefits based on someone else's earnings record, this will trigger new "deemed filing" rules, meaning that you'll be deemed to have filed for any benefits available to you. This eliminates your ability to draw a benefit based on someone else's earnings record while allowing your own benefit to grow until a later date.

Couples who have missed the window will need to look at alternative Social Security claiming strategies as part of their overall retirement planning. Although this gravy train is coming to a halt, there are fortunately many other ways to maximize your retirement income -- and you can read about them here on

The article Social Security: If You're Married, Here's How Things Have Changed originally appeared on

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright 1995 - 2016 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.