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Can couples still use the 'file and suspend' strategy?

No. “File and suspend,” also known as “claim and suspend,” was a maneuver for married couples to maximize benefits. As part of the Bipartisan Budget Act of 2015, Congress eliminated the loophole that made file and suspend possible.

Here’s how it used to work: One spouse — let’s say a husband — reaches full retirement age (the age at which you are entitled to 100 percent of the benefit computed from your earnings history) and files for Social Security. His wife claims spousal benefits on his record.

The husband then asks Social Security to suspend his benefits. During the suspension he accrues delayed retirement credits, which could increase his eventual benefit up to 8 percent a year. His wife is doing the same by postponing filing for her own retirement benefits. But all the while she is collecting the spousal benefits.

Congress made two major changes in the law.

  • Your spouse or children cannot collect benefits on your work record while your own benefits are suspended. 
  • Under “deemed filing” rules, married people filing for Social Security at any age are automatically claiming both their retirement and their spousal benefit. Previously, this was the case only for people who claimed benefits before full retirement age.

The Social Security Administration (SSA) says that ending file and suspend “preserves the fairness of the incentives to delay [retirement benefits], but it means that you cannot receive one type of benefit while at the same time earning a bonus for delaying the other benefit.”

'Deemed filing' exceptions

The deemed filing rule does not apply to people born before Jan. 2, 1954. They can still file what is called a “restricted application” for just spousal benefits, but only if they are full retirement age or older.

Anyone born before the cutoff date reached full retirement age by Jan. 1, 2020, and will turn 70 by Jan. 1, 2024. After that, filing a restricted application would have no practical effect because you would already be eligible for your maximum retirement benefit.

There are two other exceptions to deemed filing: If you are caring for a child who is under 16 or disabled, or if you are entitled to Social Security disability payments, you can file a restricted application for spousal benefits without simultaneously claiming retirement benefits.

 

Updated September 27, 2022