We investigate the prospect of enhancing the phase sensitivity of atom interferometers in the Mach-Zehnder configuration with squeezed light. Ultimately, this enhancement is achieved by transferring the quantum state of squeezed light to one or more of the atomic input beams, thereby allowing operation below the standard quantum limit. We analyze in detail three specific schemes that utilize (1) single-mode squeezed optical vacuum (i.e. low frequency squeezing), (2) two-mode squeezed optical vacuum (i.e. high frequency squeezing) transferred to both atomic inputs, and (3) two-mode squeezed optical vacuum transferred to a single atomic input. Crucially, our analysis considers incomplete quantum state transfer (QST) between the optical and atomic modes, and the effects of depleting the initially-prepared atomic source. Unsurprisingly, incomplete QST degrades the sensitivity in all three schemes. We show that by measuring the transmitted photons and using information recycling [Phys. Rev. Lett. 110, 053002 (2013)], the degrading effects of incomplete QST on the sensitivity can be substantially reduced. In particular, information recycling allows scheme (2) to operate at the Heisenberg limit irrespective of the QST efficiency, even when depletion is significant. Although we concentrate on Bose-condensed atomic systems, our scheme is equally applicable to ultracold thermal vapors.