What is a Qualified Retirement Plan?

Social Security’s Restricted Benefit

Why would anyone want to restrict their Social Security payments? 

Well, it’s not the payments being restricted it is the type of application that is filed.  The restricted application is filed when, for example,  a wife wants to receive her husband’s spousal benefit instead of her own Social Security benefit.  The idea here is to allow the possibly still working wife or early retired wife to receive monthly SS payments from the spousal benefit of her retired husband. This allows her own SS benefit to accrue credits each year until age 70 when she would then stop the spousal benefit from her husband’s SS  and begin drawing from her own benefit.  For a middle income couple this could increase total Social Security payments by $40,000 to $50,000 depending on earnings during their working years.

This is one of many combinations of Social Security planning and these options have been around for a longtime, some of them since the very beginning of the program.  What is different now?  Retirees are coming to understand Social Security is a life income annuity with a cost of living feature built in requiring understanding and planning to maximize the benefits.

There at least 81 different Social Security combinations and options to consider when signing up for retirement benefits and it takes a computer program to calculate them all to determine the best one in an individual situation.

If you would like to explore your Social Security benefit options contact Tim Barton, ChFC for an analysis.  List your SS estimated monthly benefit for both spouses and current age in the comment section.

2 Responses

  1. wayne bryant

    Hi Tim: I am 64, wife is 65. my estimate ss is 2430/mo at 66, 3270 at 70. wife is 1120 at 66, 1480 at 70. I want to retire at 68 and maybe not start my ss until 70. I think the best way to go is wife files for her ss at 66 and I file for ss at 66 restricted to spousal benefit. Then when I turn 70, I file for my full benefits and wife files for spousal benefit. Can this be done? I have run some numbers and this seems best in both short to get us from age 68 to 70 and in long term. What do you think?

    1. Hi Wayne, thanks for your comment. Here is my recommendation-
      Strategy: You Suspend, Wife Files Restricted
      •At your age 66 (Full Retirement Age), you file for your Social Security benefits and immediately suspend payments
      •At your age 70, you start your own Social Security benefits with delayed credits
      •At your wife’s age 67, your wife files a restricted application for spousal benefits
      •At your wife’s age 70, your wife files for her Social Security with delayed credits

      Assuming age 85 life expectancy your Cumulative Lifetime Benefits: $1,207,488

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