Gather your information together and know a few things about your Social Security benefits before you ask for advice.
file and suspend
Spousal Benefits are for One Spouse at a Time
Note: with the passage of the Bipartisan Budget Act of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. This post intends to clarify something that comes up repeatedly: both spouses cannot collect Spousal Benefits at the same time. If you stop and think about the mechanics of Spousal Benefits, it should become clear to you that this isn’t possible. Below is a recap of the rules that are necessary for Spousal Benefits to work. Image via Wikipedia Rules for Spousal Benefits 1. In order for a spouse to file for Spousal Benefits, the other spouse in the couple must have filed for his or her own […]
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Delayed Retirement Credits – When are These Applied?
If you delay filing for your Social Security benefit, for each month that you delay you will earn delayed retirement credits. The increase for each month of delayed retirement credit is 2/3% (0.667%) for every month. This equates to 8% in delayed retirement credits for every year of delay. But when are these credits applied to your benefit? As with so many Social Security-related calculations, timing is everything. With delayed retirement credits, the key is exactly when you stop delaying and start collecting benefits. Starting Benefits Before Age 70 When you’re delaying benefits past your full retirement age (FRA), you can start receiving benefits at any age after FRA up to age 70. So, for example, if you decided to start your benefits upon the month of your 67th birthday, you’d have 8% in credits earned if your FRA was age 66. For the sake of this example, let’s say […]
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New Rules for File and Suspend
So the heyday is over, file and suspend under the old rules is gone forever as of April 30, 2016. Those were the days, my friend. We thought they’d never end. We’d file and suspend forever and a day. But not any more… Or, may we still file and suspend? Of course we can still file and suspend, the rules are just more restrictive now. When you suspend your benefits these days, all benefits that are payable based upon your record are suspended as well. For example, if you have a child who is eligible for benefits based on your record, when you suspend your benefits the child’s benefits will be suspended as well. The same goes for spousal benefits based on your record. To be clear, the rules about suspending benefits are: You must be at least Full Retirement Age When you suspend benefits, your own benefit will not […]
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What Must I Do Before April 30, 2016?
There is a great deal of confusion surrounding the new Social Security rules that were put into place with the Bipartisan Budget Act of 2015 (BBA15). The part that is bothering folks the most right now is the deadline that is coming up, on April 30, 2016. What’s important about April 30, 2016? What must I do before April 30, 2016? The rule changes in BBA15 indicated that the suspension of Social Security benefits would be treated differently beginning 180 days after passage of the law. The law was passed on or about November 2, 2015, and so 180 days after that is April 30, 2016. What’s the change? First of all, in order to suspend your benefits, you must be at or older than Full Retirement Age (FRA). For folks who will be eligible to take advantage of the old suspend rule, that means you must be 66 before […]
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SSA Updates File & Suspend Guidance
You can listen to this article by using the podcast player below if you’re on the blog; if you’re reading this via RSS, there should be a “Play Now” link just below the title to access the audio. If you’re receiving this article via email, there should be a “Download Now” link within the text of the message to retrieve the audio file. Recently the Social Security Administration provided some guidance regarding how the end of file & suspend will be handled, in light of the changes that were brought about by the passage of the Bipartisan Budget Act of 2015 (BBA15). If you’ll recall, the option to suspend your Social Security benefit (part of File & Suspend) allowed one member of a couple to establish a filing date which would then provide the other member of the couple with the eligibility to file for a spousal benefit. The first […]
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Everything You Need to Know About File & Suspend and the April 30 Deadline
By now if you’re of a certain age, you have probably heard about the end of the file & suspend option for Social Security benefits. If not, click on this link to learn more about this option and the April 30 deadline due to changes made by the Bipartisan Budget Act of 2015. However, as my email inbox indicates, you have lots of questions about file & suspend. This article is my effort to cover all the bases with regard to everything you need to know about file & suspend and the April 30 deadline. For starters, if you and your spouse were born after April 30, 1950, this article does not apply to you, so you can stop reading. If one of you was born before April 30, 1950, the file & suspend option only applies to that individual, not to both of you. Of course, if both of you were born […]
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Get some now, get more later
Note: with the passage of the Bipartisan Budget Bill of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. When you have reached Full Retirement Age (FRA – age 66 if you were born between 1946 and 1954), you have the option to file for Spousal Benefits separately from your own benefit. This is known as a restricted application – and is often referred to as “get some now, get more later ”. Of course, you must either be married to another Social Security recipient who has filed for benefits, or you have divorced after 10 years of marriage to someone who is at least 62 years […]
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File & Suspend vs. Restricted Application
Note: with the passage of the Bipartisan Budget Act of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. These provisions in Social Security filing are, without a doubt, the two that cause the most confusion. Being very complicated provisions and also provisions that can be very helpful to folks wishing to maximize benefits, file & suspend and restricted application are often mis-used or completely misunderstood. So at the suggestion of a reader, seeing a comment response I’d given to another reader, I will provide some additional background on just what is the difference between these two, as well as when one is used versus the other. […]
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Uncoupling File & Suspend
Note: with the passage of the Bipartisan Budget Act of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. By now you should be somewhat familiar with the File & Suspend strategy, where an individual files for Social Security benefits and then immediately suspends them. This strategy is often used so that the individual can enable other dependents’ benefits (such as spousal or children) based upon his or her record, while delaying receipt of his or her own benefits in order to accrue delay credits on his benefit. What you may not realize is that you don’t have to file & suspend at the same time. These […]
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File & Suspend and Restricted Application are NOT Equal
Note: with the passage of the Bipartisan Budget Bill of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. We’ve discussed the Social Security filing options of File & Suspend and Restricted Application many times before, but it seems that folks continue to confuse these two options. It’s easy to see why: one (File & Suspend) can be used to enable the other (Restricted Application). Also, neither option is available until the individual is at least at Full Retirement Age (FRA). It’s important to know the difference between File & Suspend and Restricted Application though – primarily because if you confuse the two when talking to the […]
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File Now. Suspend Later.
Suspending benefits is a facet of Social Security filing that usually only gets written about in connection with filing – File and Suspend is often referred to as a single act, but it’s actually two things. First you file for your benefits, which is a definite action with the Social Security Administration, establishing a filed application on your record. Then, you voluntarily suspend receiving benefits. If this happens all at once, the end result is that you have an application filed with SSA, but you’re not receiving benefits. Since you have an application filed (in SSA parlance, you’re entitled to benefits), your spouse and/or dependents may be eligible for a benefit based on your record. Since you are not receiving benefits, your record earns delayed retirement credits (DRCs) of 2/3% per month that you delay receipt of benefits past your Full Retirement Age (FRA). (Note: you can only suspend receipt […]
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File and Suspend in the Crosshairs?
Note: with the passage of the Bipartisan Budget Act of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. Apparently in the President’s recent budget documentation there is a brief mention of a desire to curtail the availability of File and Suspend as an option for Social Security benefit filing. The reason, it appears, is that the Obama administration views this option as one used only by high income folks to take advantage of the government with this valuable option. The problem with that viewpoint is that it is used by folks of all income levels, and in fact if it is taken away this could cause […]
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Can Both Spouses File a Restricted Application for Spousal Benefits Only?
Note: with the passage of the Bipartisan Budget Bill of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. In the wake of my post last week, Can Both Spouses File and Suspend?, I received multiple iterations of the same question, which is the topic of today’s post: Can Both Spouses File a Restricted Application for Spousal Benefits Only? Unlike the original situation where technically it is possible to undertake but the results would not be optimal, in this situation it’s not technically possible. (The one exception is in the case of a divorced couple. For the details on how it works for divorcees, see this article: […]
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Can Both Spouses File and Suspend?
Note: with the passage of the Bipartisan Budget Act of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. This question continues to come up in my interactions with readers, so I thought I’d run through some more examples to illustrate the options and issues. The question is: Can both spouses file and suspend upon reaching Full Retirement Age, and collect the Spousal Benefit on the other spouse’s record, allowing our own benefit(s) to increase to age 70? Regarding file & suspend and taking spousal benefits, although technically both of you could file and suspend at the same time, only one of you *might* receive spousal benefits […]
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Social Security Spousal Benefit at or After FRA
Some time ago I wrote an article on the Social Security Spousal Benefit Before FRA, and an astute reader (thanks, SD!) pointed out the obvious to me: I hadn’t written the complementary piece on calculating the spousal benefit at or after FRA. So let’s get right to it! When you wait until Full Retirement Age to file for spousal benefits, there is no reduction of that portion of your benefits. In other words, the spousal benefit will be based on 50% of your spouse’s PIA minus your own PIA, and then this amount will be added to whatever retirement benefit that you’re receiving on your own record. This additional benefit can’t increase your total benefit to a point greater than 50% of your spouse’s PIA. Here are some examples: Started own benefits early Alice and Terry are both age 66. Alice started her own benefit early, at age 62. Her […]
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3 things you can do if you’ve filed for Social Security benefits too early
I often hear from people who, for whatever reason, decided to file for their Social Security retirement benefit immediately upon reaching 62 (or 66, or whatever age), and now they have found out that this wasn’t necessarily the best option for them to maximize their lifetime Social Security benefits. There are several things that you can do about this – three that come to mind at the moment. Below we’ll work through each of these ways to fix a situation where you filed too soon. Pay it back If it’s been less than 12 months since you filed, it’s possible for you to withdraw your application for benefits and pay back all that you’ve received to date. Once you’ve done this, as far as Social Security is concerned, you never filed. All of your benefit options are intact, just as if you hadn’t filed in the first place. If your […]
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Family Maximum and File & Suspend
Note: with the passage of the Bipartisan Budget Act of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. I recently received the following email from a reader: I am 66 and my wife is 45, and our son is 12. I intend to delay my filing for Social Security benefits until age 70 in order to provide the highest survivor benefit for my wife since I’m so much older than her. But I also realize that my wife and son may be eligible for benefits now if I file and suspend. According to my SSA statement my benefit now at age 66 is $2,576. Since my […]
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Clarification on Questions About Spousal Benefits
Note: with the passage of the Bipartisan Budget Act of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. Since I’ve been receiving quite a few inquiries about certain aspects of the Spousal Benefit, I thought I’d put up an article with a few definitive statements about this confusing part of the Social Security system. 1. If you are eligible for a Spousal Benefit and you’re under Full Retirement Age, when you file for your own benefit, you are automatically filing for both your own benefit and the Spousal Benefit at the same time. This is known as the deemed filing rule. By “eligible”, we mean that […]
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