The Social Security Spousal Benefits Loophole: What Changed and Why It Matters

For decades, married couples had access to a valuable strategy for maximizing their social security spousal benefits. This approach, known colloquially as a loophole, allowed one spouse to claim benefits at full retirement age while the other delayed their own payout to age 70, then switch between their own and their spouse’s benefits. However, this opportunity effectively closed in 2024 when the last eligible retirees—those turning 70 on January 1, 2024—used this method for the final time. Anyone born after January 1, 1954, cannot access this strategy due to changes implemented through the Bipartisan Budget Act of 2015.

Understanding What the Loophole Allowed

The now-expired loophole worked through a strategy that leveraged the Social Security Administration’s rules in a specific way. A married couple could structure their claiming strategy so that the higher-earning spouse would postpone filing until age 70, thereby earning delayed retirement credits that significantly increased their monthly payout. Meanwhile, the lower-earning spouse could claim reduced spousal benefits earlier. When the primary earner reached 70, they could maximize their own benefit amount, while the secondary earner’s payout remained tied to the primary beneficiary’s record.

This approach represented a sophisticated way to optimize household income during retirement. For a concrete example: if a spouse’s full retirement benefit was $2,000 monthly at age 67, postponing until 70 could increase that amount substantially through delayed credits. The spousal benefit, meanwhile, would remain capped at 50% of the primary beneficiary’s full retirement amount—creating an asymmetry that couples learned to navigate.

The Policy Shift and Its Impact

When Congress passed the Bipartisan Budget Act of 2015, the rules changed for anyone turning 62 after January 1, 2016. This legislative shift eliminated the ability to use the social security spousal benefits strategy in the traditional way. The transition was gradual—the loophole remained available for those already grandfathered in, but no new retirees could access it. By 2024, the final window closed.

The impact was significant because married couples lost a valuable planning tool. Without this loophole, couples must now employ different strategies to coordinate their claiming decisions and achieve the highest combined household benefit.

New Approaches for Married Couples Today

Since the social security spousal benefits loophole no longer exists, married couples need alternative tactics. Here are three essential approaches:

Plan Your Claiming Strategy Collaboratively

The foundation of modern Social Security planning for married couples involves careful coordination. Social Security always pays whichever is higher: the individual’s own benefit or the spousal benefit. According to Matthew Allen, co-founder and chief executive officer of Social Security Advisors, “It’s critically important for married couples to do Social Security planning.”

Couples should establish online accounts with the Social Security Administration to review estimated benefits at various claiming ages. This enables informed decision-making about which spouse should claim first and when the second spouse should file. The timing decision is now more critical than ever, since couples cannot rely on the old strategy to maximize their combined payouts.

Understand the Cost of Claiming Too Early

One of the most consequential decisions is when to begin collecting. Although the full retirement age is currently 67 for most workers, you can file as early as 62. However, this choice carries a permanent penalty. Filing five years early results in a benefit reduction of approximately 30%.

Consider this scenario: if your full retirement benefit is $2,000 monthly at age 67, claiming at 62 would permanently reduce it to $1,400. This penalty applies not just to the primary earner but to their spouse as well. When a lower-earning spouse files at 62, their spousal benefit—which is already limited to 50% of the primary beneficiary’s full retirement amount—suffers a permanent cut. This compounding effect makes early claiming a costly choice for many couples.

Recognize That Waiting Until 70 Isn’t Always Optimal

While waiting to claim Social Security typically increases your monthly payment, the optimal claiming age varies by household. Delaying until age 70 maximizes the benefit amount through accumulated delayed credits, but spousal benefits operate under different rules.

A spouse’s maximum benefit is capped at 50% of the primary beneficiary’s full retirement benefit amount. Even if the primary earner waits until 70, the spouse’s portion remains capped. This structural limit means the secondary earner may find a different claiming age more advantageous based on life expectancy, household needs, and other factors. Couples should evaluate whether waiting until 70 truly optimizes their specific circumstances or whether claiming at full retirement age or another point makes more sense.

Moving Forward Without the Loophole

The expiration of the social security spousal benefits loophole requires couples to be more strategic than ever. Without this planning tool, success depends on understanding how claiming age affects payouts, recognizing the permanent penalties of early filing, and acknowledging that the spouse’s maximum benefit carries inherent limitations. Working with a financial advisor or the Social Security Administration can help couples model different scenarios and make decisions aligned with their retirement goals.