Last month, the House and Senate passed a surprise bill that may make important changes to Social Security benefits. In an effort to decrease spending, Section 831 of the new budget eliminates some popular claiming strategies, including “File and Suspend” claiming. Experts have estimated that the changes could amount to a decrease of $50,000 in lifetime benefits for some retirees.
Elimination of File and Suspend Claiming
The strategy that is beneficial to many married couples called “File and Suspend,” will be eliminated in six months. The strategy allows one spouse to file and suspend benefits so the other spouse can begin claiming spousal benefits while the working spouse continues to accrue credits.
If you are 65 and ½ or older, you may have the opportunity to file and suspend your social security benefits before April 29th, 2016. After that deadline, the file and suspend feature will no longer exist.
Suspended Filers May Have to File Early
Those who plan to file for benefits and suspended their own payments in order to provide benefits for a spouse or a child will have to file for their own benefits early at permanently lower levels or lose the benefits for their family until they file. Generally, taking benefits early reduces payments significantly, up to 50% in some cases depending on age and when payments are started.
Social Security claiming strategies should always be reviewed with an experienced financial professional to optimize the total lifetime benefit. If you aren’t sure whether the changes apply to you or have questions about your social security claiming strategy, contact me today at 858.756.0004 or email me at [email protected]
About Deb Sims
Deborah Sims is the Principal of Estate Management Group, a wealth management and financial services firm offering comprehensive and customized strategies to help her clients manage their assets and feel confident in their future. Her mission is to serve as her clients’ most trusted wealth advisor through professional knowledge, integrity, and personalized wealth management services. Based in San Diego, California, Deb’s team has offices in Rancho Santa Fe, Old Town, and Del Mar. She invites you to contact her team today to learn more about how they can help you.