Patricia Manko
Congress has recently changed the method used by married couples to collect Social Security benefits during retirement. Of course, Social Security rules can be complex, and its important to understand what is available to ensure you’ll have enough retirement income to meet your needs.
1. File-and-suspend Strategy Ends for Married Couples
The way file-and-suspend works:
The higher earning spouse files for social security benefits at full retirement age (FRA) and then immediately suspends them. This allows them to earn retirement credit increases to their benefit (8%/annum) for delaying their claim and substantially increasing their benefit when they do file at age 70. Once the higher earning spouse has filed, their spouse, upon reaching their FRA, may claim spousal benefits. When the higher earning spouse reactivates his/her claim, at age 70, their spouse will then switch to collecting their own social security benefits, rather than a spousal benefit.
The change and whom it effects:
If you are born in 1953 or earlier, and have already implemented file-and-suspend, you may still utilize the file-and-suspend strategy. If you are born on January 1, 1954 or earlier, fulfill all age requirements and have not filed, you must file to claim benefits by April 29, 2016. If you are born after January 1, 1954, you will not be able to utilize the file-andsuspend strategy.
2. Restricted Application for Spousal Benefits
The way restricted application works:
An individual at FRA would claim their social security benefits as a spouse while delaying claiming, and thereby growing their own benefit.
The change and whom it effects:
Under the new rules, at the time an individual applies for multiple benefits, they will simply receive the benefit that provides the largest benefit check. It will not be possible to apply for one benefit and then switch to another at a later time. This strategy was widely used by divorcees claiming a spousal benefit while delaying claiming their own benefit.
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