SS_Medicare_flipbook_2017 - page 10

The Bipartisan Budget Act of 2015 effectively eliminated two claiming strategies used by
some married couples to enhance benefits, and made other changes to Social Security.
Restricted Application
By filing a “restricted application” for a spouse-only
Social Security benefit upon reaching full retirement
age, some married individuals have been able to
delay claiming benefits on their own work records
while receiving a spousal benefit. Meanwhile, their
own worker benefit would increase in value (about
8% annually), up to age 70.
New rules:
Only individuals who were born on
or before January 1, 1954, can continue using the
“restricted application” for a spouse-only benefit
and later claim their own worker benefit.
Those born after January 1, 1954, who are eligible
for a worker benefit and a spousal benefit will
receive whichever amount is higher when they file
for Social Security.
File and Suspend
The original “file and suspend” strategy ended as
of April 30, 2016. It was typically used by married
couples to enhance their combined lifetime benefits.
Upon reaching full retirement age, one spouse would
file for worker benefits and immediately suspend
them, which enabled the individual to earn delayed
retirement credits (while often continuing to work)
and his or her spouse to collect a spousal benefit.
New rules:
The ability to “file and suspend” benefits
upon reaching full retirement age is still available, but
no benefits will be paid to you or to others during the
suspension period.
Some married couples who turned 66 before the new
rule’s effective date may have had time to take advantage
of the original claiming strategy.
Changes to Social Security Claiming Strategies
Average annual cost-of-living adjustment (COLA) since 1975.
Inflation was too low to trigger a COLA for 2010, 2011, and 2016.
Source: Social Security Administration, 2016
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