[NOTE: Our software has been updated to reflect the new claiming rules, so reports are now available. Caveat: if you think you still qualify for the file-and-suspend option, you should first order our new custom report and then contact us for an additional custom report (free) that fully addresses the file and suspend issue.]

[Also note that if you are filing and suspending so that your spouse can use the restricted application (or free spousal) option at a later date, you are the only one affected by this April 29 deadline. The other spouse does not need to file for spousal benefits until they turn 66.]

If you want to use the file and suspend strategy for getting spousal benefits for your spouse while letting your own benefits continue to grow, you must have filed and suspended by April 29, 2016. If you suspend after that date (even though you may have filed earlier), spousal benefits paid on your record will also be suspended. (Keep in mind that if you file and suspend, that eliminates any opportunity for you to use a restricted application strategy to get “free” spousal benefits.)

There are two circumstances in which you (or your spouse) might want to file and suspend. In either circumstance, the person filing and suspending must be age 66 or older by no later April 29, 2016.

If you fall into this circumstance, and you want our help, you should do the following. Order a married persons report from us for $39.99. Then contact us for further free assistance and an additional free report.

CIRCUMSTANCE 1:

This case involves using file and suspend in order to set up a restricted application strategy for the other spouse.

In this circumstance, the spouse (let’s say the wife) who stands to receive spousal benefits must have been born in 1953 or earlier. She can claim spousal benefits at age 66 while letting her own retirement benefits continue to grow, provided the husband has filed prior to her filing for spousal benefits.  That is, she can use the restricted application strategy.

In order for her to get spousal benefits, he needs to have filed for his own benefits. If he wants ,to file and suspend, then he must meet the following two conditions: 1) he is at least 66 years old by April 29, 2016, and 2) he is not four or more years older than his wife. If he is more than four years older, there is no need to suspend. He will be 70 before his wife can file a restricted application.

CIRCUMSTANCE 2:

This case does not involve a restricted application strategy.  Rather, the file and suspend strategy is used to allow the wife to claim spousal benefits and her own retirement benefits (if any) at the same time. To simplify the discussions, assume the wife has no retirement benefits.

The husband wants to wait until 70 to claim benefits. However, if he is 66 or older by April 29, 2016, he can file and suspend and let his own benefits grow until age 70.

In order to claim spousal benefits, the wife must be at least 62. The husband could file and suspend by April 29 provided he is at least 66 but less than 70. This means that the age gap between the husband and the wife in this example could approach 8 years (versus 4 years in Circumstance 1).  For example, if the husband is 66 in March 2016, he could file and then suspend payments until he reaches age 70 in March 2020. Suppose the wife is 8 years younger, so she turns 62 in March 2020. She could claim spousal benefits for one month while his benefits remained suspended. Of course, if the age gap was less than 8 years, she could receive spousal benefits for up to 4 years while his were under suspension. If the age gap is greater than 8 years, nothing is gained by filing and suspending.

If you fall into this circumstance, and you want our help, you should do the following. Order a married persons report from us for $39.99. Then contact us for further free assistance and an additional free custom report that deals with file and suspend.

[NOTE: Our software has been updated to reflect the new claiming rules, so reports are now available.]

Legislation  has worked its way through Congress (as part of the bill to raise the Federal debt ceiling) that would eliminate two claiming strategies used by many seniors: 1) file and suspend, and 2) restricted application. See Section 831 of the bill.

The President signed the bill on 11/2/15, so it is now law. It will go into effect on April 29, 2016 (unless the SSA chooses to extend that deadline).

Based on our reading of this new law, some groups of Social Security claimants will not be affected by these changes, while others will lose all access to these claiming strategies.

I. GROUPS NOT AFFECTED:

1) Single people

2) Widowers

3) Divorcees who were born in 1953 or earlier.

4) Couples who are already pursuing a restricted application claiming strategy.

These are couples where the primary beneficiary has already claimed his/her benefit and the spouse has claimed a spousal benefit. The spouse will still be able to switch to their own benefit at a later date.

5) Couples who are already pursing a file and suspend strategy.

These are couples where the primary beneficiary has already filed and suspended, and the spouse has claimed a spousal benefit. The spouse will still be able to claim their own benefit at a later date. The primary beneficiary will also be able to claim his/her own benefit at a later date.

6) Couples who are planning to pursue a restrictive application strategy and the person who plans to claim a spousal benefit was born in 1953 or earlier.

These are couples where the primary beneficiary plans to claim his/her benefit in the future (or has already claimed a benefit), but the spouse has not yet claimed a spousal benefit. As long as the spouse was born in 1953 or earlier, the spouse will be able to claim a spousal benefit after reaching 66 and then claim their own benefit later.

7) Couples who plan to pursue a file and suspend strategy before April 29, 2016, and the person who plans to claim a spousal benefit was born in 1953 or earlier.

The new law provides a window of 180 days after the law becomes effective where couples can still use the file and claim strategy.

II. GROUPS AFFECTED BY THE CHANGES:

1) Divorcees who were born in 1954 or later

These divorcees will be able to claim either a spousal benefit or their own retirement benefit (whichever is larger), but they will not be able to switch from one to the other at a later time.

2) Couples where the person who was previously planning to claim a spousal benefit first than switch to their own benefit later under a restricted application strategy was born after 1953.

People born after 1953 will not be able to claim one benefit and then switch to another benefit later.

3) Couples who are planning to pursue a file and suspend strategy, but wait more than six months to file and suspend.

The new law allows people to file and suspend for another 180 days after the law goes into effect. If someone waits more than six months, they will not be able to use this strategy. They will be able to pursue a restricted application strategy if the person who claims the spousal benefit was born in 1953 or earlier.

III. SOME RULES-OF-THUMB FOR INTERPRETING PREVIOUS REPORTS

Here are a couples of suggestions, based on our reading of the law) for helping you to determine whether recommendations in previous reports are valid.

1. If a scenario recommends “file and suspend” it is probably not a valid recommendation. Only if the person can sensibly file and suspend no later than April 29, 2016 will this strategy work. (The exact cut-off date is 180 days after the law becomes effective, which appears to be 11/2/15.)

2. If the scenario recommends a “restricted application” (and no file and suspend involved), it is almost surely a valid recommendation if the person was born in 1953 or earlier. If they were born in 1954 or later, a recommendation to file a restricted application would not be valid. Whether this statement also applies to ex-spouses is unclear at present.