Industry Insights

Important Changes to Social Security

December 2015
Author:  Steven Martin

Steven Martin


Wealth Advisors

1901 S. Meyers Road, Suite 500
Oakbrook Terrace, IL 60181-5210


Will Social Security be there when you are ready to retire? While that’s a question we’re not ready to answer, we now know there will be fewer choices on how to claim benefits when you get there.

On November 2, 2015, President Obama signed the Bipartisan Budget Act of 2015. In addition to raising the federal debt limit, the law also eliminates two popular Social Security retirement benefit claiming strategies.

One strategy, commonly called “file and suspend,” will be eliminated effective April 30, 2016, for anyone who hasn’t already filed a claim. This strategy allows one spouse to file for benefits when reaching full retirement age and immediately request that benefits be suspended, allowing his or her spouse to file for spousal benefits. Individuals still will be able to delay taking benefits beyond their full retirement age, and there may be situations where this will make sense. However, the new law prevents anyone from claiming a spousal benefit based on the earnings record of a spouse who is not also collecting benefits.

The other eliminated planning opportunity is the “restricted application.” In this strategy, one spouse files first for a spousal benefit, allowing him or her to continue earning delayed retirement credits on his or her own earnings record and then switch to this higher benefit level at a later date, generally age 70. Often referred to as “claim some now, claim more later,” this change affects individuals who reach age 62 in 2016 or later, meaning this option will remain available for those reaching age 62 on or before December 31, 2015.

These changes provide a small window of opportunity for individuals who will be at least 66 years old by April 30, 2016. They still may be able to take advantage of some of the planning opportunities afforded by the current law if they’re not already receiving benefits.

If you have any questions on these changes and how they could affect you, contact a BKD Wealth Advisors professional.

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