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There is no longer a Social Security spousal benefits loophole for workers at full retirement age who voluntarily suspend their benefits but allow a spouse to claim benefits on their record.
There used to be a “file and suspend” loophole meant to help married couples maximize their Social Security benefits. However, after Congress passed the Bipartisan Budget Act in 2015, this loophole no longer applies.
'File and suspend' loophole
How the spousal benefits loophole worked
Your Social Security retirement benefits increase by a percentage for every month you delay starting your benefits past age 62 and until age 70.
The “file and suspend” tactic allowed a worker to apply for retirement benefits at full retirement age or older, then voluntarily suspend their actual payments.
Even though they themselves would not receive benefits, their spouse would receive a spousal benefit.
At age 70, they could begin receiving benefits and take advantage of the percentage increase.
How spousal benefits work now
You can still delay your benefit payment at full retirement age in order to earn a monthly percentage increase, but other payable benefits on your record, including spousal and family benefits, are also suspended.
You aren't able to receive spousal benefits or other benefits on another person’s record when yours are suspended.
Divorce is an exception to the rule
As a divorced spouse, if your ex-spouse voluntarily suspends their retirement benefits, you can still receive divorced spousal benefits.
Now that the old loophole doesn’t work, what are my options?
Here are some ways to maximize your Social Security benefits without the loophole:
Wait to retire. Wait until at least retirement age, typically 65 or older, depending on what year you were born. While you can retire as early as age 62, the Social Security Administration reduces your maximum benefits if you claim before your full retirement age and increases your benefits until age 70.
Spousal benefits. You can still take advantage of spousal benefits and receive an amount of up to 50% of your partner’s benefit, depending on when they retire. Plus, if you qualify for your own record but their benefit amount is higher, you will get an additional amount so the combination equals your spouse’s benefits.
Divorced spousal benefits. You can still receive benefits on your ex-spouse’s record if your marriage lasted at least 10 years and your ex-spouse is at least 62 years old, unmarried, entitled to receive more than you are from Social Security and qualified for retirement or disability benefits.
Dependent benefits. Your biological child, stepchild, adopted child or dependent grandchild can also qualify for Social Security benefits. To qualify, they must be unmarried. They must also be under age 18 unless they're 18 or 19 and a full-time high school student or have a disability that started before age 22. Benefits paid to your child do not decrease your retirement benefit.
Survivor benefits. Surviving spouses can apply to receive reduced benefits as early as age 60 and then switch to their own benefits at age 62 if they qualify on their own accord.
» Ready for the next step? Learn how to apply for Social Security
You can't apply for survivor benefits or divorced spouse survivor benefits online. You must contact the Social Security Administration at 1-800-772-1213 to request an appointment.