With the passage of the 2015 Budget Bill, two important Social Security claiming strategies called “File & Suspend” and “Restricted Application” are going away for everyone under age 62, whether you are in retirement or thinking about retirement. Understanding these changes, and taking certain steps prior to this enactment, can mean thousands more in lifetime benefits for you, your spouse, and your family.
The benefits of these two disappearing strategies are best explained in two common scenarios:
Your spouse collects her spousal benefit (50% of your full retirement benefit*) while you “File & Suspend” your own retirement benefits to age 70 to take advantage of Social Security’s higher Delayed Retirement Credit (i.e., SS increases 8% per annum after FRA).
Scenario # 2
Your spouse files for early SS benefits at age 62. When you reach your FRA* you file a “Restricted Application” that entitles you to 50% of her projected full benefit, while deferring your retirement benefits to age 70 to take advantage of Social Security’s higher Delayed Retirement Credit (i.e., SS increases 8% per annum after FRA).
What to do?
If you are under age, 62, and plan to be in either category, or, are simply not sure how these expiring benefits could affect you and your spouse, we suggest you sit down with a qualified financial planner ASAP. Because is this case, time really is money!
*SS Full Retirement Benefit is now age 66 for people born in 1943-1954, and will gradually increase to 67 for those born in 1960 or later.