Here’s the scenario: The husband was born in 1952 and his full retirement age benefit amount is $1,700 per month. The wife was born in 1953 and her full retirement age benefit amount is $1,000 per month.
Here is their plan:
Wife to file for her own retirement benefit to begin at age 65 and five months.
Husband to file for his spousal benefit to begin at age 66 and 11 months.
Husband to file for his own retirement benefit to begin at age 70.
1. Is this strategy allowed? Would this strategy be disallowed because of the "deemed filing" rule?
2. Are there any problems or flaws with this plan? Is there anything that can be done to improve or optimize this plan to get more money?
You are on the right track. “They are one of the few that are still able to file a restricted application with Social Security,” says Adam Beaty, a CFP with Bullogic Wealth Management.
The "deemed filing" rule, says Beaty, states that because he files for a spousal benefit, he will be filing for his own benefit too. However, because they are still grandfathered in on the old rule (born before 1954), the deemed filing rule does not apply to them. He can file a restricted application that states he wants spousal benefits only.
“Their plan is exactly what I would recommend them to do,” says Beaty. “Have her file for her benefits now, they will be forever reduced by about 4% due to filing before full retirement age. He will then file for spousal benefits on a restricted application. His benefits will continue to grow until he reaches 70 and then he will turn on his full benefits. The only downside to this strategy is that the Social Security Administration does not deal with restricted applications very often, so knowledge from them could be sparse.”
Got Questions? Get Answers!
Email your questions about retirement and money to Robert.Powell@Maven.io
Here’s the scenario: The husband was born in 1952 and his full retirement age benefit amount is $1,700 per month. The wife was born in 1953 and her full retirement age benefit amount is $1,000 per month. Subscribe for full article
Get Access to Our Exclusive Content
Already subscribed? Log In