The Social Security File and Suspend strategy will be eliminated May 1, 2016.  The Bipartisan Budget Act of 2015 made this change.  Specifically with “Closure of Unintended Loopholes”.   File and Suspend allows you to file for retirement and claim benefits for your spouse.  At the same time you immediately suspend your own benefit until full retirement age.  Recall TheMoneySkinny™ mission is to save you time and money.  Let’s review this strategy and what’s changed.  Act now if you intend to File and Suspend.

Social Security File and Suspend

The current age range for claiming Social Security benefits is between 62 and 70 years old.  Full benefits begin at age 66.  Previously, you could file to claim benefits but suspend receiving those benefits until age 70 for a greater monthly payout.  At the same time, your spouse could file for a restricted benefit to claim spousal-only benefits.  So while the spouse receives payments, the primary lets their own payment grow by delaying it.

Changes

You can no longer collect spousal or dependent benefits when the primary beneficiary suspends benefits.  Details are available at Social Security Retirement Planner.  People who reach full retirement age by May 1, 2016 are grandfathered. They have until May 1, 2016, to file a request with Social Security.  Use it or lose it.

Retired or Not?

With Social Security File and Suspend, the person is selecting retirement, getting spousal payments, at the same time delaying Social Security retirement payments.  Perhaps continuing to work until age 70 letting his/her benefit grow.  Allowing faux retirement to get spousal payments while not actually retired is a mismatch.

Going Forward

The decision on timing Social Security benefits is critical.  Factors are eligibility, earnings, marital status, health, etc.  An online Retirement Estimator and other helpful information is available at the Social Security Administration website.   Complete a Social Security application for your actual benefit amount.  Contact the Social Security Administration regarding specific situations.

• The Social Security File and Suspend strategy will be eliminated May 1, 2016.
• People who are 66 as of April 30, 2016, keep the ability to file a restricted application and suspend benefits if they file a restricted application by May 1, 2016.
• Contact the Social Security Administration regarding specific situations.