Social Sec. File and suspend is gonna end.

[gcgang]

http://www.freerepublic.com/focus/f-news/3354004/posts

Spousal SS claiming strategy of File and Suspend, for new people only, ending.

Supposedly will save $billions.

I'm 61. Makes sense for me to wait until 70 to claim (longevity insurance), but I'm paranoid gov will continue to chip away at bennies, may take the cash next year.

 

[stepford]

Already an extensive thread on this. Lots of good information until it got shut down cause some folks couldn't resist turning it into a rant on who deserved what benefits and who should pay.

 

[Htown Harry]

Here's a nice summary from a blogger

New Social Security Rules: What You Need to Know

There are two primary categories of changes:

• One set of changes to the deemed filing rules (which affect the “restricted application” strategy [an application to collect just spousal benefits while they allow their retirement benefit to continue growing] ), and
• Another set of changes to the rules regarding voluntary suspension of benefits (which affect the “file and suspend” strategy).

 

[travelover]

............ Lots of good information until it got shut down cause some folks couldn't resist turning it into a rant on who deserved what benefits and who should pay.

Look on the bright side, this is a fresh opportunity to argue those points all over again.

 

[Slow But Steady]

Look on the bright side, this is a fresh opportunity to argue those points all over again.

That's just what I was thinking.

 

[dallas27]

Glad they fixed this.


Sent from my iPhone using Early Retirement Forum

 

[jpjr]

Clearest - simple - explanation of the new regulations

Budget Deal Nixes Popular Social Security Claiming Strategies-Kiplinger

I keep reading all the latest analysis of the pending budget plan and the effects it will have on SS claiming strategies. Without getting into what is good or bad about what is going to happen, I found this article to be the easiest to understand.

 

[pb4uski]

Interesting. This will add a different strategy for us. As background, DW's benefit is ~ 30% of mine and we are close to the same age (I'm 8 months younger).

Before these changes, our plan was for her to file based on her work record at her FRA, I would file and suspend 8 months later at my FRA and her benefit would get bumped up to half of mine and I would start collecting an enhanced benefit at age 70.

Now, I think she will file based on her work record at her FRA, I would file a restricted application for spousal benefits only 8 months later at my FRA ad I would get half of her benefit and then I would start collecting an enhanced benefit based on my work record at age 70.

..... Since the file-and-suspend strategy is disappearing, this will work only if one spouse is actually receiving benefits. In that case, the other spouse could file a restricted application and collect spousal benefits at the same time he or she continues to rack up delayed retirement credits.

Say Mary's full retirement age benefit amount is $500 a month, and her husband, John, is eligible for a full retirement age benefit of $2,000 a month. Both are 66. Under the current rules, Mary could get a spousal benefit of $1,000 a month if John files and suspends his benefit. The couple will no longer be able to do that, but Mary could take her $500 benefit and John could file a restricted application for a spousal benefit of $250 a month while continuing to earn delayed retirement credits. ....

From 70 on what our benefits will be the same as before this change... the change will cost us ~$900/month from FRA to 70..... about $40k. No problem.

 

[ivinsfan]

Interesting. This will add a different strategy for us. As background, DW's benefit is ~ 30% of mine and we are close to the same age (I'm 8 months younger).

Before these changes, our plan was for her to file based on her work record at her FRA, I would file and suspend 8 months later at my FRA and her benefit would get bumped up to half of mine and I would start collecting an enhanced benefit at age 70.

Now, I think she will file based on her work record at her FRA, I would file a restricted application for spousal benefits only 8 months later at my FRA ad I would get half of her benefit and then I would start collecting an enhanced benefit based on my work record at age 70.



From 70 on what our benefits will be the same as before this change... the change will cost us ~$900/month from FRA to 70..... about $40k. No problem.

This is an interesting take on the benefits change, now I understood some of these changes will also impact survivor benefit in the file and claim a spousal benefit Of course the deceased person can't be receiving a benefit. I also thought when you filed they will check both your spousal and own amount and simply pay you the larger one and you wouldn't have the option of upgrading later. How soon do you all think the actual regulations will be published?

 

[pb4uski]

No idea... we're actually 6 years from FRA so we have lots of time to sort things out. My plan would be to study claiming strategies with socialsecuritysolutions.com or similar advisers as we near our FRA.

 

[ivinsfan]

No idea... we're actually 6 years from FRA so we have lots of time to sort things out. My plan would be to study claiming strategies with socialsecuritysolutions.com or similar advisers as we near our FRA.

So you are not in the 62 grandfathered area, we both are which should help us a little bit going forward

 

[MissMolly]

Now, I think she will file based on her work record at her FRA, I would file a restricted application for spousal benefits only 8 months later at my FRA ad I would get half of her benefit and then I would start collecting an enhanced benefit based on my work record at age 70.

Pb4uski - I don't think you will be able to do this (but I could be wrong). It is my understanding that only folks who will be 62 or older by the end of this year will be able to claim 50% spousal and let their own grow until 70. That is what the "deemed" part is all about in the new regulations. I think you are only 60 this year? Again, I could be wrong.

 

[ivinsfan]

Pb4uski - I don't think you will be able to do this (but I could be wrong). It is my understanding that only folks who will be 62 or older by the end of this year will be able to claim 50% spousal and let their own grow until 70. That is what the "deemed" part is all about in the new regulations. I think you are only 60 this year? Again, I could be wrong.

That was what I understood as well, when you apply (those under 62 this year)going forward you will just get the biggest benefit you are entitled to and that's all. I'm not going to believe any mainstream articles until the regulations are actually published.

 

[NW-Bound]

... Now, I think she will file based on her work record at her FRA, I would file a restricted application for spousal benefits only 8 months later at my FRA ad I would get half of her benefit and then I would start collecting an enhanced benefit based on my work record at age 70...

I don't think you can do that. When you file at FRA, you will get your own benefit because it is higher than the spousal benefit off your wife.

Here's a nice summary from a blogger

New Social Security Rules: What You Need to Know

Excerpt from above link:

For anybody who will not yet be age 62 as of 1/1/2016, however, there are two big changes.

First, the deemed filing rule will be applicable regardless of age. That is, even if you have reached full retirement age, if you file for retirement benefits or spousal benefits and you are also eligible for the other type of benefit (spousal or retirement) at that time, you will be deemed to have filed for both types of benefits. This singlehandedly eliminates the restricted application strategy for those who are affected.
​

 

[pb4uski]

After I read Mike Piper's post I saw that he shared your views that my amended plan to file for a restricted applicaiton would not work, but I'm still hung up on the example in the Kiplinger article

Say Mary's full retirement age benefit amount is $500 a month, and her husband, John, is eligible for a full retirement age benefit of $2,000 a month. Both are 66. Under the current rules, Mary could get a spousal benefit of $1,000 a month if John files and suspends his benefit. The couple will no longer be able to do that, but Mary could take her $500 benefit and John could file a restricted application for a spousal benefit of $250 a month while continuing to earn delayed retirement credits

Unless perhaps they meant that both are 66 NOW, whereas DW and I will not be 66 for some time.

 

[NW-Bound]

Unless perhaps they meant that both are 66 NOW, whereas DW and I will not be 66 for some time.

Yes. Some SS clauses are grandfathered in.

Life is not fair, is it? But then, the younger generations will be saying the same thing about us when they pay more SS tax and perhaps have to work till 70.

 

[pb4uski]

Y...Life is not fair, is it? ...

True, but the change doesn't bother me a whole lot especially if it helps preserve the system for everyone.

 

[ivinsfan]

After I read Mike Piper's post I saw that he shared your views that my amended plan to file for a restricted applicaiton would not work, but I'm still hung up on the example in the Kiplinger article



Unless perhaps they meant that both are 66 NOW, whereas DW and I will not be 66 for some time.

I think making new plans isn't very productive until the regulations are actually published. "Experts" are posting articles on-line without anything factual at this time.

 

[Greencheese]

I suspect we'll be seeing several of these small tweaks every year or so going forward for the foreseeable future. Its easier to change the rules slowly over time like this.

 

[sherrywilliam]

Change will effect us, because husband will have to claim earlier so I can get spousal benefit. I do not get my own ss.

Approximately 2 year age difference trying to figure should I forgo spousal and claim when he claims at 70 making me approx 68 .Or just have him collect 68 me 66 .

 

[MichaelB]

The last SS File and suspend thread was shut down due to off topic posts. Let's keep thine one on topic, many forum members are still interested.

 

[sherrywilliam]

The last SS File and suspend thread was shut down due to off topic posts. Let's keep thine one on topic, many forum members are still interested.

yes I read the other was skeered to postbeing a ss spousal

 

[Ed_The_Gypsy]

I got mine.

Waiting for attacks on Roth IRAs now.

 

[Focus]

A wrap-up by Mark Miller, who does a great job of reporting on retirement-related issues:

"How file-and-suspend ended: Here’s the back story" RetirementRevised

From the article:

Ok, here’s why the closing of the F&S window makes sense – and why it doesn’t really signal a broader shift in the way Social Security reforms are made. The budget act closes a loophole that is costing the Social Security Trust Fund $9.5 billion annually that it can ill afford. The loophole was created without Congressional intent with the passage of the Senior Citizens Freedom to Work Act of 2000.

He makes it clear that it really was unintended. I initially wasn't happy about the change, but I'm OK with it now.

 

[manerac]

A wrap-up by Mark Miller, who does a great job of reporting on retirement-related issues:

"How file-and-suspend ended: Here’s the back story" RetirementRevised

The alleged $9.5B yearly pricetag for F&S has been tossed out in other references without backup.

Another claim is that it only benefits a tiny percentage of SS recipients -- less than 0.1% causing "the unnecessary drain on the Social Security system", per this AARP article:

Budget Act Safeguards Social Security, Medicare for Older Americans – AARP

That would make 1/1000 x 60million = 60,000 filing for F&S, give or take, each collecting $158,000/year. Seems a bit high.