Social Security Loophole: Tactics to Increase Spousal Benefits

There is a Social Security loophole that married couples took advantage of to increase the spousal benefits they receive. In this article, read and find out what this loophole is!

Social Security Application [Photo: Investopedia]

Some beneficiaries are aware that postponing their Social Security benefits has its advantages. This is because the Social Security monthly retirement benefits increase every year it is postponed. There are married couples who took advantage of this Social Security loophole. This is because they receive spousal benefits at full retirement age while still contributing to their retirement benefits. This loophole is made by possible by submitting a restricted application. A restricted application will simply let a beneficiary choose the benefit they want to apply for.

An article on MARCA states that this Social Security loophole tactic can be done by beneficiaries who were born in the year 1953 or earlier. Unfortunately, the Social Security benefits cannot be postponed or increased or beyond the age of 70. Therefore, all beneficiaries born in the year 1953 or earlier is already 70 or will be 70 in 2023. This means that a spouse must have been born in the year 1958 or earlier to take advantage of this Social Security loophole. This is because they must be 62 years old or older when they filed a restricted application.

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Social Security Loophole Closed

According to an article in Nisivoccia, before April 2016, this Social Security loophole allowed a married employee to postpone their Social Security retirement benefits after reaching the full retirement age. This is to enable their spouse to receive benefits as well. This tactic is somewhat considered an important adjustment as a result of the Bipartisan Budget Act of 2015.

Unfortunately, this action specifically closed the Social Security loophole that has been used by many beneficiaries to increase their Social Security spousal benefits. However, the changes are enacted gradually over time. This means that the change is still under way and that some beneficiaries can still use this Social Security loophole to increase their benefits.

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