2016/2017 Federal Budget: Social Security Changes – Part 2

The other strategy addressed1 by the budget is known as the Restricted Application and has commonly worked this way:

Wife is currently receiving Social Security benefits based on her earnings history. Husband chooses to let his benefits continue to grow until his age 70. At husband’s Full Retirement Age, he decides to file for benefits but to restrict his application to spousal benefits only, meaning his unclaimed benefits would continue to grow at 8% per year, but in the meantime, he would receive benefits equal to one half of his wife’s benefits. And this would not impact her benefits in any manner. If husband hadn’t claimed these spousal benefits, they would simply never be received and gone forever. The new rule now states that anyone filing for benefits is deemed to also have filed for his own.

In this example, the husband at Full Retirement Age would automatically receive the higher of his own benefit or the spousal benefit, so he couldn’t allow his benefit to increase 8% per year until age 70 because his filing would cause him to start receiving his benefit at Full Retirement Age.

Those affected by this new rule are those who will reach age 62 after 2015. There likely are individuals today not taking advantage of this opportunity who should consider doing so.

Click here to review Part 1!

If you have questions about Social Security claiming strategies, feel free to contact one of our Wealth Planners. It’s possible that a smart claiming decision could be really beneficial for you.


Published: November 5, 2015

Authored by: Joshua R. Wichman, CFP®, MBA

Direct Phone: 812-602-6319

Email: jrwichman@paynewealthpartners.com

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Source: https://www.kitces.com/blog/congress-ends-file-and-suspend-restricted-application-and-other-voluntary-suspension-social-security-strategies/

The information in this material is only as current as the date indicated, and may be superseded by subsequent market events or for other reasons. While all information prepared in this document is believed to be accurate, any statements of opinion constitute only current opinions of Payne Wealth Partners, Inc., which are subject to change and which Payne Wealth Partners, Inc. does not undertake to update. Accordingly, you should not put undue reliance on these statements. The information does not attempt to examine all the facts and circumstances that may be relevant to an individual’s financial needs. Payne Wealth Partners, Inc. is not soliciting any action based on these statements.

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