Do you know if it will affect you?
As you are probably already well aware, figuring out when to start your social security benefits is no easy decision. Unfortunately, it has recently become a little more complicated. In October of 2015, congress passed the Bipartisan Budget Act of 2015. There was an addition to the Act that will affect Social Security Benefits, and could mean changes to your plans for claiming benefits.
The two claiming strategies that were most prominently impacted were the “File and Suspend Strategy” and the “Restricted Application for a Spousal Benefit” which were eliminated by the passing of this legislation. In both cases, the strategy involved an individual taking a benefit from another person’s record (usually a spouse’s record). The most common scenario was one spouse would file for and immediately suspend their benefit. That would then make the other spouse eligible to collect a “Spousal” benefit instead of starting their own. When fully utilized, it has the potential to add tens of thousands of dollars to social security benefits over the lifetime of the two individuals. Unfortunately, as noted above, the rules are changing; if you are of a certain age, you may still be able to do something about it.
Are you going to be age 66 or older by this April 30th (meaning you were born before April 30th, 1950)? If so, you still have time to file and suspend your benefit. However, once April 30th of this year passes, you will no longer have the option and you will not be able to get a do-over. Even if you were 62 or older in 2015 (meaning you were born on January 1st 1954 or earlier), you can still file a restricted application to collect a spousal benefit. Again, these strategies have the potential to add tens of thousands of dollars to your social security benefits during your lifetime.
Do you think you might be affected by the new rules, or know someone who will be? Then we encourage you to talk with a financial planner to make sure you are not missing out on an opportunity.
Please contact us at (800) 318-7848 with your specific questions or to schedule a time to meet in our office. For more information, fill out the request information form.