Show Me The Money!

I love to get a deal on things I buy, so I shop with coupons, wait for sales, and rack up rewards at stores I frequent. It may sound strange, but some people can get a deal when claiming Social Security by using the Restricted Application strategy!

In general, if you have paid into Social Security for the required amount of time, you earn a benefit based on your annual earnings. You can start your full Social Security retirement benefit at your Full Retirement Age (age 66 to 67 for most of us). You also have the option to start your benefit as early as age 62 for a discounted amount or as late as age 70 for a much higher benefit.

Those that are married, divorced, or widowed may be eligible for a benefit based on the earnings record of a spouse, ex-spouse or deceased spouse, known as a spousal benefit. This is where the Restricted Application strategy comes in for those reaching Full Retirement Age in 2019 and born before January 2, 1954. This strategy lets an applicant restrict his/her claim to a spousal benefit only. When claiming the spousal benefit only, your own benefit continues to grow at 8% per year until age 70. This means money now and more money later!

Keep in mind, for a claimant to use this strategy, the spouse must have started their Social Security benefit. In addition, widows and widowers may have additional claiming and switching options.

There’s no surefire way to know you are going to come out ahead no matter how and when you claim Social Security, but for those that meet the Restricted Application requirements, this can be a great option.

Juli Erhart-Graves, CFP®, Worley Erhart-Graves Financial Advisors

This article was included in the Worley Erhart-Graves Quarterly Newsletter. Download the printable version here.