Social Security Benefits Loopholes | 2022 Strategies Inside

Many couples rely on Social Security spousal benefits for income during their retirement years. Even if one spouse does not have a work history, then spousal benefits will allow them to receive monthly payments based on their spouse’s work record. These benefits can be up to 50% of the primary earner’s benefit amount. In the past, there were several spousal benefit loopholes that existed that allowed different strategies for maximizing Social Security spousal benefits. Today, many of those loopholes have been closed. So, which loopholes are still available, and which ones have been closed? Keep reading as we give you all the details, plus provide tips for maximizing your benefits according to your situation.


Social Security Spousal Benefits Loopholes

When you get ready to start your Social Security retirement benefits, you often consider the amount of your spouse’s benefit as well. Several considerations would go into the decision of when to start spousal benefits versus when to start your own benefits. This is because the loopholes allowed several different strategies to get the most money from the Social Security Administration (SSA). Here are some of the most popular loopholes, along with details about whether they are still available.


— Loophole #1. File & Suspend

The file and suspend strategy was extremely popular for married couples until this loophole was closed by the Bipartisan Budget Act of 2015. The closure took effect in April 2016, so you can no longer take advantage of this method. However, here is how it worked. You likely already know that you cannot start receiving spousal benefits until the primary beneficiary has applied for benefits. The file and suspend method was a strategy whereby the primary beneficiary would apply for benefits but then suspend the beginning of the benefits until later.

By doing this, the spouse could go ahead and start spousal benefits while the primary beneficiary continued to accrue delayed retirement credits. This allowed the primary beneficiary to increase their benefit amount by waiting past full retirement age to start their benefits, but the spouse would be receiving benefits during this period. After the closure of the loophole, the law still allows a person to file for benefits and suspend them until a later date. However, no other benefits that are payable on that record may be received during the suspension period. So, your spouse cannot receive benefits during that time.


— Loophole #2. File & Restrict

This strategy was popular among married couples where both spouses had their own earnings record. As soon as one spouse began to receive their own benefits, the other spouse would file an application for benefits. However, they would restrict their application to spousal benefits only. This would allow the spouse to receive spousal benefits while their own retirement benefits continued to grow past full retirement age. This means they would receive a higher monthly benefit upon reaching age 70. At age 70, they would switch to their own benefits and begin to receive a higher amount.

Similar to the file and suspend method, the file and restrict loophole has also been closed. Now, when a person files an application for Social Security benefits, they are applying for all benefits for which they are eligible. This includes both spousal benefits and retirement benefits based on their own record. They will receive the higher amount of the two, but they cannot restrict their application to one type of benefit and claim the other benefit later.


— Loophole #3. Deemed Filing

The deemed filing strategy is simply another term for the restricted application strategy. A deemed filing is where an applicant would file a restricted application for only spousal benefits. This would allow their own benefit to continue to grow, even while they were receiving spousal benefits. Upon turning 70, they would file another application for their own benefits and switch over to the higher amount. This strategy was also shut down in 2015 when Congress passed the Bipartisan Budget Act. Again, filing an application for benefits acts as an application for all benefits for which you are eligible.


Strategies For Maximizing Social Security Spousal Benefits

Now that the loopholes mentioned above are closed, what are the best ways to maximize your Social Security spousal benefits? There are still a few things that you can do to make sure you are getting the most money possible during your retirement years. Here are some strategies that you can take.


— Strategy For Married Couples

Now that most of the loopholes for married couples have been closed, the best strategy for maximizing your benefits is to wait as long as possible to start them. If both spouses will be claiming their own Social Security benefits, then waiting until age 70 is the best strategy. This will make both benefits as high as possible. However, if one spouse has a limited work history, then spousal benefits might make the most sense.

In that case, the primary earner should wait until age 70 to start benefits. The spouse, on the other hand, can go ahead and start benefits at full retirement age if the primary earner is already receiving benefits. Spousal benefits do not continue to grow past full retirement age, so there is no need to wait longer than that to begin your benefits.


— Strategy For Divorced Spouses

Even if you are divorced, you can still receive spousal benefits based on the earnings record of your ex-spouse in some cases. First, the marriage must have lasted at least ten years, and you must not be remarried. Typically, your ex-spouse must already be receiving Social Security benefits before you can apply for spousal benefits. However, if you have been divorced for more than two years, then you can go ahead and claim benefits as soon as you reach age 62. Remember that even if your ex-spouse has a current spouse who receives spousal benefits, this will not affect the amount of the benefits that you will receive.


— Strategy For Widowed Spouses

So, what is the best claiming strategy for widowed spouses? There are a couple of things to consider here. First, remember that survivor benefits can be started as early as age 60. Similarly, getting remarried after age 60 does not affect your ability as a surviving spouse to claim Social Security survivor benefits. However, if your current spouse has a high earnings record, then you might be better off claiming spousal benefits instead of survivor benefits.

The other thing you can do is claim survivor benefits while delaying your own benefits. This works well if you have your own earnings record under which you can claim benefits. Unlike the loopholes mentioned above, you can still utilize this strategy. You can start your survivor benefits as early as age 60 and allow your own benefit to grow until you reach age 70. Then you can switch over to the higher benefit amount using your own work history. This strategy can be extremely useful in retirement planning for widowed spouses.


— Strategy For Late Claimers

If one spouse does not have a large earnings history, then it usually makes the most sense to wait as long as possible for the primary beneficiary to start their Social Security payments. This can help maximize the couple’s retirement income in the long run. Remember that your benefit can continue to grow larger than your primary insurance amount by waiting past full retirement age to start benefits. If possible, the primary earner should wait until age 70 to start benefits so that the benefit amount is maxed out.

If you plan to receive benefits based on your spouse’s work record, there is no need to wait past full retirement age (FRA). Those benefits will not continue to grow past FRA, although they will be reduced if you start them early.


Social Security Spousal Benefits Eligibility

There are a few criteria that you must meet to qualify for Social Security spousal benefits. First, your spouse must already have applied for Social Security benefits. Next, you must be at least age 62. If you are caring for a child under 16 or a disabled child, then you can apply for spousal benefits even if you have not reached age 62. Remember that the new filing rules state that applying for any benefits means that you are applying for all eligible benefits. So, if you also qualify under your own work record, you will receive the higher amount of the two.

When it comes to ex-spouses, the marriage must have lasted at least ten years, and you must not be remarried to claim benefits on your ex-spouse’s work history. If your ex-spouse has a current spouse who is receiving benefits, that will not affect the amount of spousal benefits that you receive.


How Much To Expect From Social Security Spousal Benefits

While the calculation of Social Security retirement benefits can sometimes be confusing, the calculation of spousal benefits is pretty straightforward. If you start your benefits at full retirement age, your benefit amount will be 50% of the primary beneficiary’s payment. Starting your benefits early will reduce the amount. So, if you start your spousal benefits at age 62, you will only receive 32.5% of your spouse’s benefit amount. For ex-spouses, the amounts are the same. You will still receive 50% of your ex-spouse’s benefit amount if you claim your benefits at full retirement age.


When To Claim Social Security Spousal Payments

Most Americans want to maximize their Social Security payments, so when should you claim your spousal benefits? The answer is much more straightforward now that most of the spousal benefit loopholes have been closed. If possible, the primary earner should wait until age 70 to claim benefits to get the highest benefit possible. However, once the primary beneficiary is receiving benefits, then the spouse should start benefits immediately upon reaching full retirement age. Spousal benefits do not increase after reaching full retirement age, so there is no value in waiting past FRA to begin your benefits.


The Bottom Line

Many retirees in prior years were able to take advantage of several Social Security spousal benefit loopholes to grow their benefit payments higher. This included the file and suspend strategy, the file and restrict strategy, and the deemed filing strategy. However, those loopholes were closed by legislation passed in 2015. Now, the best way to maximize your spousal benefits is to wait as long as possible to begin your benefits. The primary earner should wait until age 70, and the spouse can claim spousal benefits immediately upon reaching full retirement age.


Frequently Asked Questions


When can my spouse collect half of my Social Security?

Your spouse can collect half of your Social Security upon reaching full retirement age, as long as you have already applied for your benefits. Your spouse can start spousal benefits as early as age 62, but the benefit amount will be reduced accordingly. Starting at age 62 would reduce the benefit to 32.5% of your benefit amount. If your spouse is caring for a disabled child or child under 16, then he or she can start benefits as soon as you begin receiving your benefits.


Can I collect my spouse’s Social Security if they are on disability?

You cannot collect your spouse’s benefit, but you might be eligible to collect spousal benefits. If you are at least age 62, then you can receive up to 50% of your spouse’s payment amount. However, you must wait until full retirement age to receive a benefit of this amount. Starting the benefits at age 62 will reduce the payment to 32.5% of your spouse’s benefit amount.


What is the maximum Social Security benefit a person can collect?

The maximum benefit a person can collect in 2022 at full retirement age is $3,345. If you wait to start your benefits until age 70, then that amount will increase to $4,194. That is the highest amount that you can receive. Spousal benefits can be as high as 50% of the primary insurance amount, or $1,672.50.


What happens to my Social Security if I remarry?

If you remarry, your benefits will not be affected if you receive benefits based on your own work record. However, if you receive spousal benefits based on your ex-spouse’s work history, then you will lose your Social Security payments by remarrying. There is one exception to that rule, though. If you are receiving survivor benefits based on your deceased spouse’s record, then remarrying after age 60 will not affect your survivor benefits.

Elliot Marks

Elliot Marks

Elliot has spent years providing clear and concise information to help navigate the complex nuances of social security and many other government services in the United States. Elliot has a passion for helping those in need of these services to be able to find timely access to news and information that is relevant and helpful to their daily lives.