Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
SS File and Suspend to End?
Old 10-27-2015, 11:05 PM   #1
Recycles dryer sheets
jdmorton's Avatar
 
Join Date: Mar 2005
Posts: 156
SS File and Suspend to End?

Saw a discussion on another retirement message board that the proposed federal House budget bill will eliminate "unintended loopholes", which supposedly includes file and suspend.

Here is a link to a column today by Larry Kotlikoff: Column: Proposed budget bill would have devastating effects on millions' Social Security benefits
__________________

__________________
Well, Helen; shall we just go home?
jdmorton is online now  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-27-2015, 11:22 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,905
Wow. Very interesting. One of the arguments frequently used by the wait till 70 crowd is that they will have plenty of warning of proposed legislation so as to take evasive action before any law modifying SS benefits is enacted. I first heard of this today. It looks like it will be passed by the house tomorrow, the senate shortly thereafter and then signed into law by the President when - next week?
__________________

__________________
ejman is offline  
Old 10-27-2015, 11:53 PM   #3
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,608
Quote:
forced to take their retirement benefit at full retirement age and if their spousal benefit exceeds their retirement benefit, they will end up getting absolutely nothing in return for each and every penny of taxes they paid to Social Security over their entire working lives.
So they are FORCED to take a larger benefit than they would have had on their own record. I'm not thinking this is the same as "getting nothing"

It's a potentially big reduction in benefits for people who were planning to take advantage of this loophole, but it was always a loophole and often cited as such, even by advocates who devised these complicated file and suspend strategies to get maximum benefits.
__________________
growing_older is offline  
Old 10-28-2015, 12:01 AM   #4
Recycles dryer sheets
thefinancebuff's Avatar
 
Join Date: Dec 2008
Posts: 262
Quote:
Originally Posted by growing_older View Post
So they are FORCED to take a larger benefit than they would have had on their own record. I'm not thinking this is the same as "getting nothing."
I agree. They are getting everything based on what they paid in, plus a bonus. Some others who earned more only get benefits based on what they paid in, with no bonus.
__________________
thefinancebuff is offline  
Old 10-28-2015, 12:12 AM   #5
Thinks s/he gets paid by the post
Telly's Avatar
 
Join Date: Feb 2003
Posts: 1,448
IF it passes as-is, I expect it to be changed once word gets out and it hits the fan. I doubt many (any?) in congress understand much about SS.

I don't think my plan to file-and-suspend at age 67 so DW can file for spousal benefit at the same time on my record at her age 66 is a complicated strategy. Her own SS record is pretty sparse.

I think the SS changes in the bill will be viewed by many as an under-handed modification of SS, with no warning, hidden in a big bill with a short fuse.
__________________
-- Telly, the D-I-Y guy --
Two fools dancing on the hands of time
Telly is offline  
Old 10-28-2015, 12:22 AM   #6
Thinks s/he gets paid by the post
timo2's Avatar
 
Join Date: Jul 2011
Location: Rio Rancho
Posts: 1,438
simplifying social security benefit options seems like it would cut into Mr. Kotlikoff's business for his calculator. That said, not exempting current recipients of the various schemes is probably unfair. The only thing worse would be to make it retroactive and go after people to pay back some funds.
__________________
"We live the lives we lead because of the thoughts we think" Michael O’Neill
timo2 is offline  
Old 10-28-2015, 07:45 AM   #7
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,809
Interesting and kind of scary that the whole thing only has a 6 month warning built in (If I'm reading the article correctly.)

The article only mentions kids in terms of disability and the spousal caretaker (pre SS age) benefit. I'm wondering if they are messing with the regular child benefit (minor children can qualify for a benefit if a parent is collecting SS.) That would impact our household.

We aren't planning on the spousal file/suspend benefit for a few reasons: 1) we have almost 10 years of age difference. 2) DH started at 62 to tap into the child benefits. 3) I was the high earner.

I think I need to go find more details about these changes.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is online now  
Old 10-28-2015, 07:52 AM   #8
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,809
Here is a link to the proposed budget text:

http://docs.house.gov/billsthisweek/...PIH-BUDGET.pdf
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is online now  
Old 10-28-2015, 07:59 AM   #9
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,809
OK - our family is clear on the kids benefit. DH turned 62 before 2015 - so child benefits will not be effected.

Section 831 (page 74) of the document I linked outlines the changes.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is online now  
Old 10-28-2015, 08:07 AM   #10
Full time employment: Posting here.
 
Join Date: Sep 2013
Posts: 511
Quote:
Originally Posted by rodi View Post
Here is a link to the proposed budget text:

http://docs.house.gov/billsthisweek/...PIH-BUDGET.pdf
Thanks for the link. I particularly liked the part where they officially redesignate the small rotunda in the House as the "Freedom Foyer". Doubtless a great place to enjoy one's Freedom Fries whilst contemplating further legislative mischief.
__________________
stepford is offline  
Old 10-28-2015, 08:17 AM   #11
Full time employment: Posting here.
NYEXPAT's Avatar
 
Join Date: Jul 2009
Location: Miraflores,Peru
Posts: 875
Interesting! I just got my award letter the other day and am waiting on the kiddes. A bit more difficult as it has entailed going to the embassy 3-4 times to provide documents. Wife is 28 yrs. younger and I was planning on suspending in four years. Besides updating the spreadsheet, we may have to rethink repatriating to the USA.
__________________
NYEXPAT is offline  
Old 10-28-2015, 08:21 AM   #12
Full time employment: Posting here.
NYEXPAT's Avatar
 
Join Date: Jul 2009
Location: Miraflores,Peru
Posts: 875
Quote:
Originally Posted by rodi View Post
OK - our family is clear on the kids benefit. DH turned 62 before 2015 - so child benefits will not be effected.

Section 831 (page 74) of the document I linked outlines the changes.
+1
Priceless, I turn 62 next month!
__________________
NYEXPAT is offline  
Old 10-28-2015, 08:30 AM   #13
Thinks s/he gets paid by the post
ronin's Avatar
 
Join Date: Oct 2003
Posts: 1,191
For those who are single or like me who's spouse is GPO'd out of eligibility there is this:

‘‘(3) In the case of an individual who requests that such benefits be suspended under this subsection, for any month during the period in which the suspension is in effect—‘‘(A) no retroactive benefits (as defined in sub-section (j)(4)(B)(iii)) shall be payable to such individual;

I planned on using file and suspend to protect the ability to claim retroactively back to FRA in the event of a life-shortening health diagnosis. I wonder if this means that even the current 6 month retro benefit for one who delays filing but doesn't suspend is now kaput? "No retroactive benefits..." seems to be be pretty clear, but this is Social Security so how likely is clarity?
__________________
We are, as I have said, one equation short. – Keynes
ronin is online now  
Old 10-28-2015, 08:36 AM   #14
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,697
Up next: means testing!
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is online now  
Old 10-28-2015, 08:41 AM   #15
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,860
I'm not sure, but I think I will be affected by this. I am 67 and have been receiving divorced spousal social security benefits for the past year, with the understanding that my own SS is still growing until I am 70 (when I planned to switch over to it).

If my understanding is correct, this bill will mean that I will be immediately shifted over to my own benefits which right now are barely greater than my divorced spousal benefits, but less than my own benefits would be at age 70. Then they would remain at the lower ("age 67", not "age 70")
level for the rest of my life, no matter what I do.

Or worse, that that shift won't even happen unless I do it myself. This is very confusing to me and it sure happened fast.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline  
Old 10-28-2015, 08:43 AM   #16
Thinks s/he gets paid by the post
 
Join Date: May 2014
Posts: 2,984
Quote:
Originally Posted by marko View Post
Up next: means testing!
They do have means testing. It's in the form of taxation of SS benefits if your income is over certain levels.
__________________
athena53 is offline  
Old 10-28-2015, 08:49 AM   #17
Full time employment: Posting here.
 
Join Date: Feb 2014
Posts: 731
Quote:
Originally Posted by marko View Post
Up next: means testing!
I was going to say that there will be incremental bumps to the FRA - so by the time I get to FRA, it'll be when I'm 70 anyway.
__________________
BBQ-Nut is offline  
Old 10-28-2015, 09:23 AM   #18
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by BBQ-Nut View Post
I was going to say that there will be incremental bumps to the FRA - so by the time I get to FRA, it'll be when I'm 70 anyway.
Pretty much. I suspect every single "too good to be true" loophole and formerly rarely-used workaround which later became too popular for its own good will be plugged by the time I'm 62. And that assumes that when I turn 62 (in 12 years) you can still collect at 62....
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline  
Old 10-28-2015, 09:25 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,697
Quote:
Originally Posted by athena53 View Post
They do have means testing. It's in the form of taxation of SS benefits if your income is over certain levels.
Sorry, I wasn't clear enough for you.

What I meant was the possibility of limiting benefits based on your NW or other income. For example, "you have $2MM in an IRA, you don't need SS at all" sort of thing.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is online now  
Old 10-28-2015, 09:29 AM   #20
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,094
Quote:
Originally Posted by marko View Post
Sorry, I wasn't clear enough for you.

What I meant was the possibility of limiting benefits based on your NW or other income. For example, "you have $2MM in an IRA, you don't need SS at all" sort of thing.
won't happen - one of the founding principles of SS (and any other social insurance program) is that need is presumed
__________________

__________________
Swing hard, look up
Big_Hitter is online now  
Closed Thread


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
File and Suspend versus File and Restrict Chuckanut FIRE and Money 12 10-18-2014 08:19 AM
I signed up for file-and-suspend, but they didn't suspend Ed_The_Gypsy FIRE and Money 25 01-03-2014 02:15 PM
File for SS at 62, Draw Until FRA and Suspend to get Delayed Retirement Credits Brett_Cameron FIRE and Money 23 11-27-2013 06:48 PM
SS File and Suspend scenario for us fh2000 FIRE and Money 7 09-10-2013 11:47 AM

 

 
All times are GMT -6. The time now is 09:40 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.