Summary of Chapter 5: “Claim Now and Claim More Later” to Boost Monthly Benefits
The “Restricted Application” approach is often called the “Claim Now and Claim More Later” strategy. This is a “married only” approach that works when one of the spouses is full-retirement age (FRA). This method is best when the low earner claims benefits, the FRA high earner files for his or her own benefits and immediately “restricts” the application and claims spousal benefits on the low earner’s work record. The high earner collects spousal benefits and accrues Delayed Retirement Credits (DRCs) from 66 to 70. At age 70 the high earner re-applies and claims benefits on his or her own work record. Many experts state that at this time the low earner spouse can claim spousal benefits on the high earner’s work record. However, before taking any action check with a financial professional to verify that the low earner spouse can change accounts. The benefits of the restricted application approach, if the high earner works for four years after FRA, include an increase to the FRA benefit of 32 percent. The DRCs will also increase the first death survivor benefit and provide a higher base for annual Cost-Of-Living-increases (COLAs). This approach is especially effective for ex-spouses who “want to catch-up” and plan to work until 70. Ex-spouses can use the restricted application strategy to increase their retirement nest eggs even if the ex-spouse does not file for benefits. Claiming strategies can get pretty complicated. The Internet provides several sources of optimal claiming strategy calculators and software programs. Prices and services vary from free online calculators to companies with live financial advisers who will file your Social Security application, monitor your account and provide you with a social security optimization report.