Skip to main content

Ask Bob: Strategies for a Social Security Restricted Application

A reader has a question about her and her husband's Social Security strategy in case of early death. Joe Elsasser, CFP®, founder and president of Covisum steps in to provide an answer.

Question

Can your experts please weigh in on the strategies outlined below?

  • June 2020 - Wife started collecting reduced Social Security benefits at age 62 
  • June 2020 - Husband filed restricted application on wife's account. Husband age 66 years 8 months 
  • October 2023 - Husband will file for Social Security on his own account at age 70 after taking full delayed retirement credits 
  • February 2025 - Wife reaches her FRA (full retirement age) at 66 and 8 months

What is the strategy if Husband passes suddenly prior to October 2023 when he would apply for his Social Security benefits on his account, i.e., no chance to change approach?

What is the strategy if Husband does not pass suddenly and there is time to make changes prior to his planned October 2023 filing?

What is the strategy if Husband has reached age 70 and passes, and has filed for his own benefit (taking full delayed retirement credits) and passes before February of 2025 when wife will have reached FRA?

What is the strategy when wife has reached FRA and beyond, and then Husband passes?

Answer

This reader was born at a good time, says Joe Elsasser, CFP®, founder and president of Covisum, just under the wire to file a restricted application for spousal benefits while still accumulating delayed retirement credits on his own benefit. As a reminder, only people born on or before January 1 of 1954 are eligible to file a restricted application and it was wise for this reader to do so. “In this case,” says Elsasser, “that filing option allows him to collect 40 months of $1200 in benefits for about $48,000 in additional benefits plus any cost-of-living adjustments!”

“For context in this example,” notes Elsasser, “I’ll use $3,000 for the husband’s full retirement age benefit based on his work history and $2400 for the wife’s full retirement age benefit based on hers.”

The important thing to remember is that if the husband dies prior to age 70 and before filing for his own retirement benefit, delayed retirement credits are calculated as though he filed in the month of death. “Because of that,” Elsasser explains, “whether the husband passes suddenly or passes with time to make changes, he should not change his filing strategy and should plan to delay to age 70, unless the wife also has a dramatically shortened life expectancy.”

Further, “if the husband passes after age 70, but before the wife reaches full retirement age, keeping in mind that her widow full retirement age is 66 and four months, not 66 and 8 months, and assuming the wife has a normal life expectancy, she should remain on her own reduced benefit until she reaches Widow FRA as the widow benefit will continue to increase until she reaches her Widow FRA” he says.

“At her widow FRA she should switch to the widow benefit and would receive what the husband was receiving, including delayed retirement credits,” Elsasser says. “If she is at least 66 and 4 months when he passes, she should take widows benefits immediately.”

This is of course specific to this example and these benefit amounts and assumes normal life expectancies for the survivor, he adds. Widow cases can get pretty complicated so it is often the case that the advice of a knowledgeable planner can be beneficial.

Got questions? Get answers!

Email Robert.Powell@maven.io

Question

Can your experts please weigh in on the strategies outlined below?

  • June 2020 - Wife started collecting reduced Social Security benefits at age 62 
  • June 2020 - Husband filed restricted application on wife's account. Husband age 66 years 8 months 
  • October 2023 - Husband will file for Social Security on his own account at age 70 after taking full delayed retirement credits 
  • February 2025 - Wife reaches her FRA (full retirement age) at 66 and 8 months
Member Exclusive

Get Access to Our Exclusive Content