Ask Larry: Should I File A Restricted Application For Social Security Spousal Benefits?

Today’s column addresses questions about restricted applications, 401(k)s and the Windfall Elimination Provision (WEP) and what methods are available to increase benefits after filing. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.


Should I File A Restricted Application For Social Security Spousal Benefits?

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Hi Larry, My wife will be 62 next month and I just turned 67. We would like to have her claim her Social Security retirement benefits next month ($888) and me apply for spousal benefits. Then when I turn 68 next year, I would file for my retirement benefits (PIA $2802) and she would file for spousal. Does this make sense and does it violate any Social Security rules? Thanks, Matt

Hi Matt, The plan you propose doesn’t violate any rules, but it might not be your best possible option. Your wife could claim her Social Security retirement benefits effective as early as November 2020. She wouldn’t be eligible for benefits for October because a person must be age 62 for at least a full month to qualify. If she files in November, you could file just for spousal benefits in that same month. Only people who were born prior to 1/2/1954 are allowed to file only for spousal benefits without being deemed to file for their own benefits, so you meet the requirement.

Assuming that your wife files this year and you file for spousal benefits, you may want to strongly consider letting your benefit rate grow until age 70 before switching to your own account. That would provide you with your highest possible monthly benefit rate, and it could also provide your wife with her highest possible survivor rate if you die before her. You and your wife may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully compare all of your various options so that you can determine the best strategy for maximizing your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry


Will Having A 401A Plan Affect My Social Security Benefits?

Hi Larry, I have a 401A plan with STRS, contributing for the past 10 years. Prior to that I paid into Social Security. Will having the 401A plan affect my Social Security benefits? Thanks, Sarah

Hi Sarah, Receiving distributions from a 401(a) plan certainly could affect your Social Security benefits. Social Security’s Windfall Elimination Provision (WEP) can cause a person’s Social Security retirement or disability benefit rate to be calculated using a less generous computation formula than the normal formula if they also receive a pension or distributions from a retirement fund based on their earnings that were exempt from Social Security taxes. Best, Larry


Is There A Provision For Increasing Monthly Benefits Now Or In The Future Not Counting The CPI?

Hi Larry, I was born in 1946 and waited till 66 to apply for benefits. Is there a provision for increasing monthly benefit distribution now or in the future not counting the CPI every year? Thanks, Brian

Hi Brian, Other than for cost of living increases (COLA), the only way that your Social Security retirement benefit rate could increase is if you work and earn more in a year than you did in one of your previous highest 35 years of wage-indexed earnings. Best, Larry


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