The Smart Social Security Strategy Nobody Knows About

Millions of Americans rely on Social Security to help them make ends meet in retirement. That makes it more important than ever to get as much in Social Security benefits as you can. But given how complex Social Security is, that task can be a big challenge. You really have to know the ins and outs of several Social Security strategies to maximize your benefits.

In the following video, Dan Caplinger, the Motley Fool's director of investment planning, looks at a little-known Social Security strategy called the restricted application strategy. Dan gives a simple explanation of the strategy, noting that under the method, one spouse files for Social Security benefits but restricts them to spousal benefits based on the other spouse's work history only. The first spouse doesn't claim benefits based on his or her own work history, instead deferring them and letting them grow until reaching age 70, at which point they max out. By doing this, the first spouse is able to get what amounts to extra benefits while still getting increased payments later on.

In discussing the benefits of the restricted application strategy, Dan points out that the strategy works best when there isn't too large a disparity between the two spouses' earnings histories. When one spouse has little or no income record, the file-and-suspend strategy often works better. Dan concludes with some discussion of the importance of making the most of both spouses' work records to maximize total benefits.

Learn more about how to get more from Social Security
It can be challenging to get information about strategies like restricted application and file-and-suspend, but having that knowledge is important in helping you maximize your Social Security benefits. To learn more money-making retirement-benefit strategies, turn to The Motley Fool's brand-new free report, "Make Social Security Work Harder For You." Inside, our retirement experts share their insight on other methods you can use to increase your monthly Social Security checks and retire more comfortably while ensuring your family's long-term financial security. Click here to get your copy today.

Read/Post Comments (1) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 18, 2013, at 3:01 PM, akdadd wrote:

    Dan --

    By "work history", I assume you mean the respective gross income amounts earned over the 30 highest earning years for each spouse?

    So, if one spouse has averages 150k over his/her career, and the other has averaged, say 50K over his/her career, then the "file and suspend" strategy is the better of the two, correct?

    If you want to use the file and suspend strategy, do both spouses have to have reached full retirement age, or only the one who is "filing and suspending"?

    Thanks for all of the great articles.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2680208, ~/Articles/ArticleHandler.aspx, 10/27/2016 8:47:01 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes