Can couples still use the 'file and suspend' strategy?

No. “File and suspend,” also known as “claim and suspend,” was a maneuver for married couples to maximize their retirement benefits by utilizing spousal benefits — auxiliary benefits one mate can receive based on the other’s earnings record. As part of a 2015 budget bill, Congress eliminated the loophole that made file and suspend possible.

Here’s how it used to work. One spouse reaches full retirement age (the age at which you are entitled to 100 percent of the benefit computed from your earnings history) and files for Social Security. The other claims spousal benefits on Spouse 1’s earnings record.

Spouse 1 then asks Social Security for a voluntary suspension of benefits. During the suspension, Spouse 1 accrues delayed retirement credits, which could increase their eventual benefit up to 8 percent a year until they reach age 70. Spouse 2 is doing the same by postponing filing for retirement benefits, but all the while they are collecting the spousal benefits.

Congress made two major changes in the law.

• Your spouse or children cannot collect benefits on your earnings record while your own benefits are suspended.
• Under “deemed filing” rules, anyone eligible for both retirement and spousal benefits is automatically deemed to be claiming both when they file for Social Security and will receive the higher of the two benefit amounts. Previously, this was the case only for people who claimed benefits before full retirement age.

Now, if one spouse suspends their retirement benefits, the other’s spousal benefits are suspended, too.

The Social Security Administration says on its website that this “preserves the fairness of the incentives to delay” retirement benefits, ensuring that someone “cannot receive one type of benefit while at the same time earning a bonus for delaying the other benefit.”

‘Deemed filing’ exceptions

There are two exceptions to deemed filing: If you are caring for a child who is under 16 or has a disability, or you are entitled to Social Security disability payments, you can file what Social Security calls a “restricted application” for spousal benefits without simultaneously claiming retirement benefits.

Until this year, there was another exception. When Congress did away with file and suspend in 2015, it grandfathered in people who were then close to Social Security claiming age. Spouses who were born before Jan. 2, 1954, and had reached full retirement age could still file for just a spousal benefit. As of Jan. 1, 2024, everyone in this cohort is at least 70 and eligible for their maximum retirement benefit, eliminating the rationale for a restricted application.

Keep in mind

Deemed filing applies to divorced spouses as well as current ones, but the prohibition on file and suspend does not. If you are receiving a divorced-spouse benefit on a former mate’s earnings record, it will continue even if your ex suspends their retirement benefit.