Loopholes in Social Security Retirement Benefits

Social Security benefit loopholes have been used for years as a legitimate way to maximize the payment that senior couples receive. These loopholes are not illegal and have helped many couples get the most from their decades of hard work and tax paying.

Retirement years can be a real struggle so it is little wonder that couples would seek to do whatever will maximize their benefits. We will take a look at some of the loopholes that have been exploited over the years and if they are still applicable today.

File and Suspend

This was a very popular loophole that was available up until April of 2016. It was eventually shut down by the Bipartisan Budget Act that passed in 2015. The government is never a fan of people finding legitimate ways of maximizing the entitlements.

So how did File and Suspend work? Those with couples Social Security benefits likely already know that you cannot start to receive spousal benefits until the primary beneficiary applies for them. With this method the primary beneficiary would apply for their benefits but delay the start on them.

With the start of primary beneficiaries benefits paused their spouse could then apply for and start spousal benefits. This allows the primary beneficiary to continue to add retirement credits to their own benefits.

The primary beneficiary could then work past retirement age, build up a bigger pension and ultimately get more money when they finally retire. Their spouse of course would have been bringing in spousal benefits that whole time.

With the law change that took effect in 2016 the primary beneficiary could still delay the start of their benefits. Unfortunately however no other benefits could be started during this suspension period. So although the pension credits would continue to accrue there would be no income from benefits during that time.

File and Restrict

This particular loophole was popular with retired couples who both had their own earnings and subsequently their own accrued pension credits. As soon as the primary beneficiary applied for their retirement benefits their spouse would do the same.

The spouse however would restrict their application to spousal benefits only so that their personal pension account could continue to accrue credits. Using this method the spouse would be able to receive a higher monthly benefit when they reached the age of 70. Once they reached 70 years old they could switch to their own benefits and get a much higher rate.

Sadly again this loophole was shut down by the 2016 regulation changes. The new rules state that if you apply for your Social Security benefits that you are applying for all of the benefits that you are eligible for. Therefore it is longer possible to just claim spousal benefits you must also claim your full pension as well.

Deemed Filing

Deemed Filing was essentially just another type of restricted application strategy and worked in the same way as file and restrict. This too was closed when new rules dictated that once you apply you are doing so for all benefits you are eligible for.

The only way to get the higher pension rate based on age would be to work until the age of 70 and not claim your benefits until then.

The Loopholes Are Closed What Can You Do?

Essentially now there are no viable loopholes to help you maximize your benefits. What can you do to help get the most out of your Social Security spousal benefits? In this section we will take a look at some strategies to get the most out of your pension. They are not exactly loopholes but rather smart planning and actions.

Married Couples

With no real loopholes to exploit you are left with few options when it comes to increasing your spousal benefits as a couple. The simplest way to get the most of your benefits may not be a popular one but it’s your best shot at more money in retirement.

In order to get a better pension benefit the only real recourse is to delay applying for your benefits for as long as you can. I told you it might not be appealing but it is likely the best option you have. Both spouses if possible can try to wait until they are 70 before they claim their benefits.

This strategy of working later into life will allow you both to reach the maximum benefits possible for your circumstances. If however one spouse has a limited work history you may make more money by having them apply for spousal benefits.

If the primary beneficiary reaches the age of 70 first their spouse should apply for their benefits at the same time as spousal benefits do not grow beyond full retirement age.

Divorced Couples

Some people are not aware that they might be eligible for spousal benefits from a former spouse. The former spouse of a primary beneficiary may be eligible if the marriage lasted more than 10 years and they have not since remarried someone else.

Generally you wouldn’t be able to claim these benefits until your former spouse actually retired. Once they are earning Social Security benefits you would be able to claim spousal benefits. If the divorced happened more than two years ago however the spouse could claim benefits as soon as they reached retirement age themselves.

Thankfully even if the primary beneficiary has remarried and their current spouse was also claiming spousal benefits, their former spouse is still eligible. There should be no decrease in the level of benefits that the ex-spouse would be able to claim.

Widowed Spouses

Thankfully benefits for widowed spouses are a little less restrictive so you do have a few strategies. It is important to remember a couple of things when it comes to widowed benefits. Firstly you can begin to claim survivor benefits at the age of 60. The second thing to remember is that remarrying after 60 will not affect your eligibility to receive these benefits.

If your new spouse has a high earnings record it may make more sense to apply for spousal benefits rather than survivor benefits. You may actually get more from spousal benefits than survivor benefits and you can not claim both at the same time.

A good thing regarding survivor benefits is that you can actually claim them while delaying a claim for your own Social Security benefits. This would allow you to accrue more pension credits, retire later and receive a higher pension.

So there is at least one loophole left although it’s certainly one that you will never have the chance to claim. If you have your own earnings record delaying your own benefits can work out well for you in the long run.

As you can start survivor benefits at the age of 60 you can conceivably allow your own benefits to accrue until you reach 70. At that time you can start your benefits at the maximum level that you are eligible for.

Claiming Late

As mentioned already in the article it is a good strategy for the primary beneficiary to try and work as long as possible up to potentially the age of 70. This is especially advised if the spouse does not have much of an earnings history. Delaying retirement as long as possible will maximize the benefits available to the couple

When Are You Eligible for Social Security Spousal Benefits?

In order to be eligible for Social Security spousal benefits the primary beneficiary must first have applied for and started their retirement benefits. The next requirement is that you have reached the minimum retirement age of 62.

There is an exception to the age requirement if you are caring for a child who is still under 16 or who suffers from a disability. In this case you can apply for spousal benefits before the age of 62 but the primary beneficiary must still have already started their benefits.

It is important to remember that due to the changes that came into effect in 2016 if you apply for spousal benefits you will also be applying for your own pension benefits as well. This will mean you will receive the higher of the two between the spousal or your own accrued pension but not both.


There are very few loopholes left in the Social Security retirement system since the 2015 Bipartisan Budget Act. Until this point there were some handy loopholes that would allow you to claim partial benefits while you accrued credits to boost others.

These days there are some strategies that can help you maximize your eventual payout but they generally require you to work beyond retirement age. It is therefore important to know what you are eligible for and when to apply for those benefits.

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