The confusing prospect of filing for social security benefits just became more complicated. The recently passed Bipartisan Budget Act of 2015 provided a major surprise to future retirees who were planning to use a popular planning strategy. The act puts and end to the “file and suspend” strategy for new filers.
This claiming strategy has been popular with those who choose to defer claiming their social security benefits until age 70 (waiting until age 70 results in substantially higher benefits for the future). Using this approach, the applicant’s spouse could claim their benefits based on the benefits of their deferring spouse, while they began to receive benefits based on their spouse’s record. This plan resulted in substantially increased benefits to the spouses of those waiting until age 70 to begin taking their social security benefits.
Those who have already implemented this strategy are grandfathered as are those who use it within the next six months. Note that this change does not reduce the benefit of waiting until age 70 to claim benefits, but the decision to defer should not be taken lightly. It should be carefully considered in light of overall financial circumstances. If you have questions about your own social security planning, we will be happy to help.
Our friends at Social Security Solutions have prepared a useful summary which you can access if you click here.