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While You Were Sleeping...

November 06, 2015

by David Pickett, EA & Kerry Pickett, CWS

Recently the House and Senate passed a budget bill and it should be signed by the President soon (and may have been by the time this is published).

Within the bill were two important changes to Social Security claiming strategies; “file and suspend” and “restricted application”. In the past a spouse could file and suspend their Social Security benefits at their FRA (or Full Retirement Age). Their spouse could then (at their FRA) apply for a “restricted application” and receive half of their spouse’s benefit while allowing their own to accumulate to a higher benefit at a later date, like age 70. This is no longer allowed going forward.

The second change is that benefits for spouses and children are no longer payable unless the wage earner is receiving benefits.

Effective Dates

  1. Anyone turning 62 by the end of 2015 can still use the restricted application option but ONLY if the other spouse is ALREADY claiming their benefits.
  2. Spouse and children currently receiving benefits under the “file and suspend” option will continue to receive their benefits.
  3. The new provision requiring that the wage earner be receiving benefits for a spousal or children payees will be effective six months after the bill is signed.

If you have further questions please consult your local Social Security office or your financial advisor.

Info

This information is intended for informational purposes only and is not intended to be a substitute for specific tax advice.

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