SS File and Suspend to End?

[athena53]

then I'm sure when you studied for course 200 (or course 5) you remembered the mnemonic PRINCIPLES for principles of social insurance programs? The N is need is presumed

Pay as you go
Relationship between benefits and earnings
Individual equity versus social adequacy
Need is presumed
etc

Ah, the acronyms! I had piles of index cards for each exam, loaded with them. I took the Casualty exams and I don't remember that acronym, but Myers' entire book ("Social Security") was on the syllabus. In one memorable year they based an exam question on one of the footnotes.

 

[Big_Hitter]

In one memorable year they based an exam question on one of the footnotes.

I remember on one that was part of the old part 3 they asked a question about the Bernoulli polynomial, which was in a question in one of the chapters.

This new GAO report on the future of SS has a bit at the beginning of the philosophy of SS.

www.gao.gov/assets/680/673385.pdf

 

[marko]

Wondering how many miles of spreadsheet analysis by the members of this forum could suddenly have been a big waste of time.

 

[Sunset]

Oh good. Maybe this is a good time to just wait (and not worry) until the bill passes and we know what is going to happen.

Often I find that bills that are not passed, are a source of needless worry.

I hope so, as I'm not yet 62, but have certainly considered the retirement opportunities of SS, so any changes impact my retirement plans.

Reality is by the time politicians get done with it, it will be very different.

I'm so surprised they have not yet removed the SS 50% and 85% taxation and just made SS fully taxable (since anyone in the SS 50% tax rate, is paying low taxes anyhow).

 

[ejman]

Wondering how many miles of spreadsheet analysis by the members of this forum could suddenly have been a big waste of time.

But just think of all the fun that was had arguing endlessly whether this or that approach resulted in a few bucks this way or that 30 years from now (If everything stays the same)

 

[athena53]

Da*n. I didn't think this affected me till I re-read W2R's post. DH is 77 and filed and started collecting long ago, so the file-and-suspend wasn't a tactic we could use. I'm 62 and my plan was to file for Spousal benefits at 66 (FRA) and my own at 70.


If the proposed changes go through I stand to lose about $50K over 4 years between 66 and 70.

 

[2017ish]

Boehner submitted an amended version of the bill - this thing is evolving

Do you have a link? (I didn't find it on a quick search, but there's an unholy amount of noise from the main bill and Boehner!)

P.S.--the discussion at Bogleheads is proceeding under a yellow caution flag; it is, however, going forward because (like here) there is a ton of interest.

 

[M Paquette]

I strongly suggest not taking action on family SS accounts based on a preliminary document. Please wait until the bill is finalized in both the House and Senate and completed reconciliation. There are lots of ways this could still change.

You might want to consider contacting your representatives with suggestions.

 

[thefinancebuff]

Da*n. I didn't think this affected me till I re-read W2R's post. DH is 77 and filed and started collecting long ago, so the file-and-suspend wasn't a tactic we could use. I'm 62 and my plan was to file for Spousal benefits at 66 (FRA) and my own at 70.


If the proposed changes go through I stand to lose about $50K over 4 years between 66 and 70.

You don't. Because you are already 62 you can still file for spousal [at FRA] while deferring your own. Because your husband's benefit isn't suspended, you will still get the spousal.

 

[Big_Hitter]

Do you have a link? (I didn't find it on a quick search, but there's an unholy amount of noise from the main bill and Boehner!)

doesn't look like the amendments changed section 831

 

[mickeyd]

bill will eliminate "unintended loopholes"

"Loopholes" are what other people use to scam the system. Benefits are what I use to get what's mine in the system. Yes, they are usually the same thing.

 

[Focus]

I also read in paper they are robbing Peter to pay Paul. The disability part of the fund is about empty and they are going to shift funds from SS retirement fund to bulk it up. Well if memory serves, that fund isn't funded so fully either.... Avoiding the problem as long as possible I guess is the plan.

Robbing Peter to pay Paul is exactly what this is. From an Oct. 28 article in Money:

The Social Security Disability fund is scheduled to run out of money in about a year. The draft bill will permit Social Security to pay all its disability claims until 2022 by shifting payroll tax revenue away from the larger retirement fund and into this program. Without this reallocation, those on disability would have seen 20% cuts when the funds were exhausted.

Right now, employees and employers each pay a 6.2% payroll tax (the wage ceiling is $118,500 this year) or a total of 12.4% into the agency’s trust fund. Of this, 1.8 percentage points is allocated to the disability fund. Under the bill, this allocation would rise in 2016, 2017 and 2018 by roughly half a percentage point to 2.37%.

 

[mathjak107]

You don't. Because you are already 62 you can still file for spousal while deferring your own. Because your husband's benefit isn't suspended, you will still get the spousal.

this is wrong . , you can only get your own at 62 , there is zero choice . the only thing you can get is a step up if 1/2 your husbands full is more than your full would have been . the difference is added to your own early benefit .

so my wife filed at 62 and got her early benefit . her early benefit is 8500.00 . her full is 10,700. when i file regardless of my age they take 1/2 my full which is 15k , subtract 10,700 and add the difference to her early benefit .

she gets no other choice at 62

 

[thefinancebuff]

this is wrong . , you can only get your own at 62 , there is zero choice . the only thing you can get is a step up if 1/2 your husbands full is more than your full would have been . the difference is added to your own early benefit .

so my wife filed at 62 and got her early benefit . her early benefit is 8500.00 . her full is 10,700. when i file regardless of my age they take 1/2 my full which is 15k , subtract 10,700 and add the difference to her early benefit .

she gets no other choice at 62

I meant filing for spousal at FRA. 62 was mentioned because it's the age for being grandfathered by this coming law. Whoever is already 62 can file for spousal at FRA while deferring his/her own benefit to 70.

 

[mathjak107]

thats better ......

however their husband would have to be collecting and not suspended if this bill passes . which in this case he is already collecting . .

 

[athena53]

Thanks for the clarifications! I know it's ever-changing and even without these latest moves, I'd have to look at whatever the current law was when I hit FRA.

Right now, I agree that at age 62, my only choice is to file for SS on my own record. I have every intention of waiting till 70 to do that. When I hit FRA I'll see what the situation is with spousal SS and if filing for it somehow shortchanges me on my own SS.

 

[Dd852]

Here's another discussion on this issue that provided me with a bit more clarity: https://www.kitces.com/blog/congres...ail&utm_term=0_4c81298299-2100bb0459-57061137



Sent from my iPad using Early Retirement Forum

 

[Htown Harry]

I did a double take at post #50, which quoted this from the Kotlikoff article posted by the OP.

Finally, there is egregious inequality in the treatment of those born a few years apart. Someone who is now 70 and who has collected a full spousal benefit since 1966 and waited until this year to collect her retirement benefit will have received as much as $50,000 more from the system than someone in the same circumstances but who just turned 66.

Someone who is now 70 was 21 in 1966. (2015-1966 = 49 years ago. 70 - 49 = age 21 in 1966.)

But doesn't eligibility for collecting a spousal benefit depend on the older spouse being at least 62?

So...

Kotlikoff is using a married couple with 41 years of age difference to build a case for outrage? (62 y.o married to a 21 y.o in 1966)

Worse, is he using the case of a 62 year old married to a 17-year-old for comparison?

I hope I'm missing something here.

 

[Hermit]

I'm collecting on my deceased wife's account until I am 70. I can't figure out if this might impact my benefits or not. I think it depends on how SS rules writers interpret the new law.

 

[ivinsfan]

I did a double take at post #50, which quoted this from the Kotlikoff article posted by the OP.

Someone who is now 70 was 21 in 1966. (2015-1966 = 49 years ago. 70 - 49 = age 21 in 1966.)

But doesn't eligibility for collecting a spousal benefit depend on the older spouse being at least 62?

So...

Kotlikoff is using a married couple with 41 years of age difference to build a case for outrage? (62 y.o married to a 21 y.o in 1966)

Worse, is he using the case of a 62 year old married to a 17-year-old for comparison?

I hope I'm missing something here.

I'm guessing that is a typo and he means age 66, not 1966.Actually after reading it again, that might be the worst run on sentence I've ever seen.I have no idea what he means!

 

[Htown Harry]

I'm guessing that is a typo and he means age 66, not 1966.

I hope so. Either way, I'm thinking there's some hyperbole involved.

 

[ivinsfan]

I'm collecting on my deceased wife's account until I am 70. I can't figure out if this might impact my benefits or not. I think it depends on how SS rules writers interpret the new law.

This is survivor benefit not spousal and treated differently,so who knows. My friend did this , for example at 66 you are entitled to 100% of the deceased spouse's actual benefit..not just 50% of their 65 benefit. There is really no double dipping involved, as obviously the deceased spouse will never collect any more checks.

 

[AtlasShrugged]

I'm probably in the minority here, but here goes. Relying on a government loophole to fund your retirement is a flawed strategy.

 

[Hermit]

This is survivor benefit not spousal and treated differently,so who knows. My friend did this , for example at 66 you are entitled to 100% of the deceased spouse's actual benefit..not just 50% of their 65 benefit. There is really no double dipping involved, as obviously the deceased spouse will never collect any more checks.

Thanks, ivinsfan. I'm hoping that is the way it will work.

I didn't know about a bump in benefits at 66. I assume you mean when I turn 66, which is next February. I'll look into that.

Edit: I looked it up and that is dependent on when you start collecting benefits. Just like collecting your own at 62, if you start earlier, the amount is permanently reduced. If I had waited until 66 to claim, they are then 100% of deceased spouses FRA benefits.

 

[Running_Man]

Well the house approved it and the idea that Social Security would never implement changes for anyone currently receiving benefits will now no longer be able to be stated. That these changes could be proposed and approved so quickly without discussion is stunning. Less than 24 hours from when I heard of it to being approved by the House.

This makes claiming at 70 less valuable, takes 40K or 6.1 percent of what my lifetime benefits would have been to be claimed away. This has the effect of adding 1.3 years to the break even point in my case. More importantly it makes planning for any benefit not presently being claimed even more in jeopardy than it was a week ago.