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.