On November 2, 2015, President Obama signed into law a budget deal that affects certain Social Security claiming strategies. The changes mainly affected two strategies that helped retirees increase their lifetime benefits:
- File-and-suspend: A strategy in which one spouse (typically the higher earner) files and suspends a claim for benefits to allow delayed retirement credits to accrue while enabling the other spouse or a dependent to claim benefits on the higher earner’s record.
- Restricted applications: When a retiree files for spousal benefits instead of claiming his or her own personal benefit (typically to allow his or her own benefit to accrue credits while still receiving some income).
Affected retirees fall into four categories:
- Retirees who have already filed and suspended or filed claims for restricted spousal benefits are grandfathered in under the new rules and will not be affected by the changes.
- Retirees who will be age 62 by January 1, 2016 (i.e. they were born before January 2, 1954) may still be able to file restricted claims for spousal benefits if their own spouse has filed for benefits.
- Retirees who will be age 66 before May 1, 2016 (i.e. they were born April 30, 1950 or earlier) may still be able to file and suspend their benefits to trigger benefits for spouses or dependents if they do so by April 30, 2016.
- Retirees who are too young to claim Social Security benefits by May 1, 2016 may not be able to use these strategies, though the timeline may change. In the future, spouses will actually have to claim their own benefits in order to trigger spousal benefits for a husband, wife, or dependent. Spouses will also not be able to just file for spousal benefits without triggering their own benefits at the same time.
Our team wants to help you understand the basics of Social Security and navigate through the recent changes. In order to help you with this retirement strategy, we are partnering with Thomas, Judy & Tucker to host a free seminar on “Making the Most of Your Social Security Benefits” in the TJT offices on January 19th. The seminar will begin at 4:00 p.m. and will conclude by 5:00 p.m. with a time for Q&A afterwards.
We will explore different strategies for claiming Social Security benefits based upon an individual or a couple’s specific situation. Our presentation will also highlight a calculation software that can be used to maximize your potential benefit based upon your individual information. We will also cover the different types of benefits available to couples and the suggested strategies for utilizing those benefits. Finally, we will review several case studies to work through the report given by the calculation software.