ALERT: New Social Security Rules Mean Some Retirees Need to Take Action Soon
President Obama’s recent signing of the Bipartisan Budget Act of 2015 enacted new rules for claiming Social Security benefits. It’s important to note that most of the benefits of Social Security will remain the same, but there will be some who need to move quickly to capture maximum lifetime benefits. Changes to benefits and filing limits stem from an effort to close perceived loopholes.
After May 1, 2016, individuals will no longer be able to “file and suspend,” and those who plan to file a restricted application for spousal benefits in lieu of their own worker’s benefit must have reached the age of 62 by the end of 2015. These claiming strategies allowed married couples to claim spousal benefits while earning delayed retirement credits, which increases future benefits.
Keep in mind, the calculations of worker, spousal, and survivor benefits will remain the same, but for a small percentage of households, the timing and coordination of spousal benefits will be limited. The bottom line is, individuals will no longer be able to claim benefits as a spouse and later change to their own worker’s benefits.
Here is one example of how a couple would have taken advantage of claiming their Social Security benefits prior to the new rules. (more…)