Born Before Jan 2, 1954? Social Security Has A Benefit For You

Maybe the best financial planning I’ve ever conducted is working with ex-spouses in planning for their retirement.

I can’t tell you how many ex’s do not understand the benefits they are entitled to off their ex-spouses record.

And once they are made aware of this opportunity, it’s like a dark curtain is lifted and a whole world of new opportunities opens in front of them.

For instance, I had a client who lived in Pennsylvania. She had been married many years to a high-income doctor. But, as is this case with 50% of marriages, they divorced.

My client wanted out of the relationship as quickly as possible and turned out, in hindsight, she didn’t hold out for as much as she probably should have.

And now, as retirement approached, she was worried how she was going to pay for everything. She was especially worried about if she had a long term care need and would have to have her daughter care for her.

It was very important to her to have Long Term Care Insurance policy. But it was out of her reach given her limited retirement income.

So, here comes ole Josh. And I simply asked her, “were you married more than 10 years?”

“Yes,” she replies.

“Do you plan on getting remarried anytime soon?”


“Were you making much money when you were married?”

She chuckled at this. “Hardly! I was taking care of the kids. So I had NO INCOME!”

Light goes off over my head. She needs to march down to the Social Security Administration office and see if she can qualify for a spousal benefit on her Ex-hub’s record.

“But what if he says no?” She asks me.

“Doesn’t matter, because he will NEVER KNOW! Has NOTHING to do with him.”

Long story short, she qualifies for an additional $300-$400 a month or so on his record.

That was almost the EXACT cost of her Long Term Care Insurance policy too.

So, it was a win/win for her.

She felt a bit more vindicated in not holding out for more assets from her divorced husband. And she was able to get more income to cover an insurance policy she wanted.

Will this happen all the time? Of course not.

Does it happen enough, though, that it’s worth pursuing?


It’s YOUR money too!

If you were born before January 2, 1954 you are the last cohort of Americans who has this wonderful opportunity to enhance your Social Security benefits.  Due to the major changes in Social Security benefits law that President Obama signed in 2015 very few people qualify for this opportunity anymore.

However, if you are one of the last who do qualify, well, DON’T MISS OUT!

Restricted Application

What exactly is it? It’s the old RESTRICTED application method.  Here is the SSA description. What this means is when you are at your Full Retirement Age (FRA) you can go down to the Social Security office,  tell the good folks there that you want to file for your spousal benefits, i.e., a restricted application, and thus allow your own benefits to grow with the 8% a year Delayed Earning Credits.

So for example, your spouse’s Primary Insurance Amount is $2500 a month.  Your PIA is $2000 a month.  At your FRA, your Spousal Benefit is one-half of your spouses PIA amount or $1250 a month.  Normally, your benefit of $2000 a month is worth more than your spousal benefit of $1250. But these aren’t normal times.

In this case your benefit of $2000 a month is worth LESS than your spousal benefit if $1250 a month.  Crazy talk right? I mean only an idiot would think $1250 is worth more than $2000. Most of the time that would be true. But in this ONE instance it’s not.

Here’s why.  If you file your restricted appication to receive your spousal benefits, you will receive the $1250 BUT and this is HUGE, BUT your own benefit will be growing by 8% a year.  So, while you’re receiving a lower benefit initially, when you turn 70 your $2000 a month benefit will have grown to $2720 without even considering ant COLA adjustments!

You are literally getting 35% more income for the rest of your life because you accepted 37.5% less income for 4 years! You would be hard-pressed to beat that scenario. In fact, if someone said they could do it, I’d advise you to run away as quickly as possible.

Let’s play this out.

Case Study

We expect Joanne to live until she’s 85.

She takes her normal SS benefit based on her record at FRA. Thus she’ll get $2k a month for 228 months.  228 months times $2k a month = $456,000 in total payments.

The second scenario she draws her spousal benefit of $1250 for 48 months and then converts over to her full benefit at 70 of $2720 for 180 months. 48 months times $1250 = $60,000.  180 months times $2720 equals $489,960 in payments.  $60k plus $489, 960 = $549,600.

This means the Joanne who took her own benefit at 70 as opposed to 66 would earn an extra $93,600 in payments if she died at 85!  If she lives to 90 her increase in benefits grows exponentially.  In fact she’d receive $43k MORE in benefits over those 5 years.

The moral of this story is don’t overlook the fact that YOU, if you qualify, can vastly increase your Social Security benefit. I can’t because I was born too late.  But if it’s there for the taking, you’d be crazy not too.


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