BOMBSHELL: File and Suspend Almost Gone

Discussion in 'Retirement Planning Forum' started by Justin Bilyj, Oct 28, 2015.

  1. Justin Bilyj
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    Justin Bilyj Well-Known Member

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    And under this week’s budget legislation, Congress has decided to close these perceived “loopholes” in the Social Security rules. By extending the rules for deemed application, it will no longer be possible to file a restricted application for just spousal benefits. And with an extension of the “suspension” rules that stipulate suspending an individual’s benefits will also suspend any benefits to other people based on the same earnings record, Congress has killed off the various “File and Suspend” strategies to allow spousal and dependent benefits to be paid while still earning delayed retirement credits.

    Notably, the crackdown on these voluntary-suspension-related tactics doesn’t actually kill the rules for voluntary suspension itself, which remains on the books. But now, aside from a few esoteric scenarios (including the recent Hold Harmless Medicare claiming strategy), voluntary suspension will be relegated to those unique scenarios where someone truly started benefits early, has had a change of mind and wants to stop them (after a year has passed and it’s already too late to withdraw the application) to earn delayed retirement credits, with the plans of starting benefits again at age 70. Of course, ideally those who wish to delay benefits for the value of earning delayed retirement credits will simply delay from the start to maximize the benefit, which makes voluntary suspension a moot point altogether for most retirees in the future!

    Article

    the ability of an individual to receive retroactive benefits after suspending is being eliminated.
    Page 76 Section 3A


    Wonder what all the social security planning software sellers are going to do now!?
     
  2. DHK
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    DHK Well-Known Member

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    https://www.socialsecuritytiming.co...0&spJobID=783548933&spReportId=NzgzNTQ4OTMzS0

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    Budget deal would nix popular Social Security claiming strategies
     
  3. Justin Bilyj
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    Justin Bilyj Well-Known Member

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    I got their email too, looks like they might be sweating it a little..

    Section 831(b) will prove particularly nasty for those who have pursued this option. Because this provision is not phased in, families will be faced with a choice within six months of the bill’s passage: either un-suspend the higher wage earner’s benefit immediately, which will permanently reduce the amount that will be available to his widow upon his death, or keep his benefit suspended and watch her checks stop. This family is likely already relying on the checks they are receiving to meet their monthly household income need, so this is really a choice between two bad options. To see something like this negotiated behind closed doors and then rushed to a vote is a disgusting abuse of the political process.
     
  4. DHK
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    DHK Well-Known Member

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    It still makes the most sense to wait until age 70 to file - at least in regards to spousal survivor benefits... you just can't have the spousal benefit at the same time... which means more pressure on the retirement portfolio until then.

    Looks like more of a need for life insurance in retirement to supplement social security retirement benefits!

    This is great news for Assurity's new "First to Die" whole life product.
     
  5. DHK
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    DHK Well-Known Member

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    Just got this email from SocialSecurityTiming:

    This is the link to register for the webinar, if you're interested in learning more about the law and changes to their software:

    https://attendee.gotowebinar.com/rt/8968331888934027521
     
  6. somarco
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    somarco Well-Known Member

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    SS planning is not cut and dried as we all know.

    My wife is subject to WEP and GPO when she draws on her SS. But she can take a spousal benefit based on my earnings at 66 with no reductions.

    We have looked at this several ways. No easy or simple answer.
     
  7. yorkriver1
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    yorkriver1 Well-Known Member

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    New law says the spouse can still take benefits solely on the record of the other spouse at age 66, then refile on their own record at 70 *if* they were no younger than 62 as of 1/1/2016.

    https://www.ssa.gov/planners/retire/claiming.html

    It's kind of convoluted the way it is written. I have one client who just T65 who told me SS phone rep told her she could no longer do that. I sent a Kiplinger's article that explains in in plain English.

    http://www.kiplinger.com/article/re...ent-spells-out-new-social-security-rules.html

    Any minute now, SS will be calling me back, will see what they say. Also, just sat in on a webinar with the area SS rep, who 1. did not explain the exception for older persons, b. did not know that one must have Medicare A&B to qualify for Medicare Advantage. I will say she did explain some complicated business about who gets what share of children's/ex-spouse/current spouse benefits for widows and divorced.

    My simple question was going to be can one apply online for Social Security at Full Retirement Age, and select filing restricted to spouse's earnings record.

    Later: they called back--

    Now know that 1. Social Security has the correct information for their phone reps
    2. If a person is eligible to claim "Restricted" to their spouse's earnings record from age 66 to 70, then claim on their own record, they must do by phone or in person, not enroll in Social Security benefits online. Age is what makes a person eligible. Anyone not yet 62 as of 1/1/2016 can't do this when they turn 66.
    If anyone was at least 62 and not collecting SS benefits, intending to wait to age 66, collecting on spouse for 4 years then switching to own at age 70 is still a sweet option.
    If one qualified for this special benefit does not apply at age 66 for benefits restricted to spouse's earnings, they will be locked in to a blended amount for life, not able to change it up for a higher amount at age 70. But you all knew this, right?
     
    Last edited: Apr 20, 2016
  8. somarco
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    somarco Well-Known Member

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    April 29, 2016 is still the file and suspend deadline.
     
  9. yorkriver1
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    yorkriver1 Well-Known Member

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    True. Part II, ability to file new SS benefit claim at age 66, but do it on spouse's record only, when the other spouse is already receiving benefits, collect on their record from 66 to 70, then file on own record, is still available if at least 62 on 1/1/16. So for the next few years as those people age in, still "a thing".

    As you said, no to file/suspend after end of this month, Part I of the changes.
     
  10. agentinsouth
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    agentinsouth Well-Known Member

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    Can someone dumb this down to a 3rd grade level for me?
     

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