A Tale of Two Social Security Strategies: File and Suspend versus Restricted Application

When at least one spouse reaches full retirement age (presently 66), two potentially valuable Social Security claiming options become available: 1) the file and suspend  option, and 2) the restricted application (or free spousal) option. The former gets far more publicity, and is better known, than the latter option. But, we find good reason to believe that the media emphasis is misplaced. For optimal Social Security claiming strategies, the restricted application option appears much more important. More on this in a moment.

First, let’s illustrate these options. Consider a married couple, Ted and Nancy. Ted is 66, his full retirement age (FRA). Nancy is 64. Under the file and suspend option, Ted files for Social Security retirement benefits and then immediately suspends receipt of them so that Mary can claim spousal benefits while his benefits continue to grow through delayed retirement credits.

Under the restricted application (or free spousal) option, Ted claims spousal benefits on Nancy’s record, assuming she is already receiving retirement benefits. Since he has reached his FRA, he does not need to claim his own retirement benefits. They can continue to grow to age 70.

Now to our main point. Our custom reports for clients identify the optimal strategies for maximizing the present value of a married couple’s Social Security benefits. We examined a small sample of 40 reports to see how often these two options played a role in the optimal strategy. Here is a summary of the results for two-earner couples with normal life expectancies.

Graph of Optimal Strategy Occurance

Another way to put it is: file and suspend is recommended in 27.5% (= 10% + 17.5%) of the reports, while restricted application (or free spousal) is recommended in 75.0% (= 57.5% + 17.5%) of them. This huge difference favoring the restricted application option surprised us, given the media emphasis on file and suspend.

The take-away: don’t simply assume that the file and suspend strategy is best for you and your spouse. Odds are it is not.

To find out whether file and suspend, or some other option, is best for you and your spouse, you can order a custom report.


6 thoughts on “A Tale of Two Social Security Strategies: File and Suspend versus Restricted Application

  1. Sheryl Dobbins

    Does the spouse have to be working to do the file and suspend option or the restricted application option at age 66 or can he be retired. I’ll be 64 when my husband turns 66. I work, he is now retired.

  2. Jim

    I am 66 spouse 63. I just filed and suspended. She just started her benefit and the deemed spousal benefit. I now have figured out that I should have had her claim her benefit and I should have filed for a restricted spousal benefit. Can I change this? The reason is to give her a bigger spousal benefit in a couple of years.


    1. William Dowd

      Hi Jim,

      This is a rather tricky situation. When benefits have been received, you may withdraw that application and repay any benefits paid within the first 12 months. I would guess that the same applies to applications which were immediately suspended, but I can’t find a definitive answer. My guess would be that you can withdraw your application, and that you’ll have to pay back the spousal benefit that your wife received. It’s possible that they’ll just deduct that amount from her own retirement benefit that she’ll continue to receive.

      This is definitely a case where you should make an appointment at your local SS office and explain the situation. You might want to bring a copy of this form with you. If the person you speak to seems unfamiliar with that form or the application withdrawal process, ask to speak with someone else.

  3. Susan

    My Husband was colecting social security since he was 65 and 10 months. He just passed away at age 71. 6 months ago. I will be 62 in November. Can I take my social security benifits now at 75% and then swith to his at age 66. Will I only get 75% of his in this case?

    1. rsettle Post author

      You are asking about another kind of switching option (that is, not file and suspend or restricted application). You can claim widow’s benefits as early as age 60 and then switch to your own retirement at age 70 (or earlier) without causing any reduction in your retirement benefits. Or, you can claim your own retirement benefits as early as age 62 and then switch to widow’s benefits at your full retirement age (or earlier) without causing any reduction in your widow’s benefits.

      So, the answer to your question is that you can claim your retirement benefits at 62 and then switch to your full widow’s benefits at 66.


Leave a Reply

Your email address will not be published.