The Bi-Partisan Budget Bill signed on November 2, 2015 is phasing out two powerful strategies – Restricted Application and File (Claim) and Suspend. However Social Security Claiming Strategies still remain. Here are a few!

There is confusion regarding Delayed Retirement Credits. The changes in the budget bill do not impact DRCs. Thus, DRCs are earned if benefits are delayed until beyond Full Retirement Age. The strategy of waiting beyond Full Retirement Age to begin benefits still applies. And of course waiting to age 70 to earn Delayed Retirement Credits of 32% may result in maximum surviving spouse benefits payable. For example, Alan begins his benefits at age 70 and receives $3,500 per month after the increase for Delayed Retirement Credits. Assuming his benefit is greater than his wife Sarah’s benefits, then will receive a larger widow benefit for the rest of her life.

Filing a Restricted Application to claim a spousal benefit without touching your own benefit is still available for folks reaching age 62 by the end of 2015. For example, Alice can file a Restricted Application, at her Full Retirement Age if she is at least age 62 by the end of 2015. Of course, for Social Security purposes, Alice turns will be at least age 62 if her actual birthday is January 1, 2016.

The File and Suspend strategy is still available for folks turning age 66, Full Retirement Age, by May 1, 2016. Caution – consideration should be giving to filing a Restricted Application prior to Filing and Suspending. Assume Al reaches FRA in March, 2016 and that his Full Retirement Age benefit is $2,000. Al can File and Suspend to allow his wife, Amy to collect a spousal benefit while is suspends. This strategy works if Amy is not eligible for her own benefits. However, let’s assume that Amy is eligible for $2,000 off of her record. A better strategy might be for Al to file a Restricted Application to receive a spousal benefit of $1,000 at his Full Retirement Age. If Al decides that a Restricted Application would be better within a year of Filing and Suspending, then he can withdrew this application and file a Restricted Application. If beyond the 12 month window, than the Restricted Application will not be available.

Both spouses can wait to age 70 and earn the maximum Delayed Retirement Credits on their own benefits.

The higher income earner should consider taking benefits prior to age 70 to allow for the payment of spousal or children benefits earlier. For example, Hal turns age 66 in January, 2017 and his Full Retirement Age benefit is $2,000. He is considering waiting to age 70 increasing his benefit to $2,640 per month due to the Delayed Retirement Credits. His wife, Samantha, will turn age 62 in January, 2016 and is not eligible for any Social Security benefits on her own record. If Hal waits to age 70 to begin his benefits then Samantha will not be eligible for a spousal benefit until age 66. If Hal begins his benefits at age 66, then Samantha will be able to begin the spousal benefit at age 62. The question is should Hal begin benefits prior to age 70 in allow for the payment of a spousal benefit earlier?

Husband to wait to age 70. Wife begins her own Social Security at between ages 62 – 66. This strategy maximizes surviving spouse benefit and begins the receipt of some benefits at an earlier age by the wife. She will step into a larger widow benefit upon her husband’s death as he waited to age 70. Under prior law, we would recommend the wife not collect before her Full Retirement Age as the Restricted Application strategy might be beneficial. With the changes, it might make more sense for the wife to begin at age 62 as she will step into his shoes in the future as a surviving spouse.

Section 831 in the Bi-Partisan Budget Bill does phase a couple of very powerful strategies, File and Suspend and Restricted Application. However these strategies are still available for certain pockets of folks. For folks at least age 62 by the end of 2015 the Restricted Application is still available upon reaching Full Retirement Age. Additionally, folks reaching Full Retirement Age by May 1, 2016 can still File and Suspend by April 30, 2016. For other folks these powerful strategies are no longer available.

However, strategies still remain. There is still a need to review the coordination of benefits between a husband and wife to determine the best time to take worker benefits and spousal benefits. Should the higher income earner begin benefits prior to age 70 allowing spousal and or children benefits to be paid? Should a wife begin her own benefits at age 62 as she will receive a widow benefit in the future. Married couples still have options and might be leaving $100,000 on the table by not exploring their options.

Take the time to review your options. You will be happy in the end!

Been a busy month with changes to Social Security contained in the Bi-Partisan Budget Bill signed by President Obama on November 2, 2015. As you probably know by now, Provision 831 titled “Closure of Unintended Loopholes” phases out the Restricted Application and File and Suspend strategies. These strategies represent the second leg in our three legged stool to maximize Social Security benefits. Even though File and Suspend and Restricted Application are being phased out, these strategies are still available for some folks. Even after these strategies are phased out folks still have options. To maximize benefits, married couples will still need to coordinate benefits between husband and wife.

The link below is our summary report of the changes contained in the budget bill. The report summarizes the changes, effective dates and selected strategies that are still available.

Do not hesitate to contact Marc Kiner by phone at 513-218-8505 or by e-mail at mkiner@mypremierplan.com with questions regarding the recent changes or how the changes might affect your personal situation or clients.

By now, folks across the country have learned about the changes to the Social Security program due to the Bi-Partisan Budget Bill signed into law on November 2, 2015. Contained in this bill is Section 831 “Closure of Unintended Loopholes”.

Even though Section 831 is phasing out the Restricted Application and the File and Suspend strategies, Social Security claiming strategies still exist. Married couples may be leaving $100,000+ on the table by not exploring their options.

Please the webinar we recorded on November 25, 2015 regarding the Social Security changes. We also discuss effective dates and SS claiming strategies to consider in the future.

Enjoy!

Many ears were listening in today’s webinar as Marc Kiner and Andy Landis discussed strategies for filing for Social Security in ways that would provide the greatest lifetime benefit for Social Security recipients. Like Marc, Andy has realized that there is an increasing need for financial advisors to have a deep and thorough understanding of Social Security rules. In a very easy to read conversational tone, Andy outlines key concepts in his book about how to wisely file for Social Security benefits. Hear more about what these two Social Security aficionados have to say about the current and future state of Social Security by listening to their recent discussion.

Last week Marc traveled to Kansas City Missouri to exhibit at Bob Jennings’ Summer Seminar. The seminar focused on S corporations and partnership taxation. Marc met with a variety of local CPAs and Enrolled Agents who were attending the seminar. Like many other advisors, these attendees are on the front lines of advising clients on Social Security benefits. Although many advisors might suggest clients consult with their local Social Security office or financial advisors regarding how to plan for Social Security benefits, this is often not the best alternative for clients. While Marc met with the attendees, he was able to explain the value of spending a day to take a deep dive into understanding the nuances of the Social Security program. Having this additional knowledge about Social Security can help advisors nationwide guide their clients towards increasing their retirement income.

Although an Ohio native with affiliations for both the Cleveland Indians and the Cincinnati Reds, Marc did catch a Kansas City Royals game while in Kansas City. “Great watching a first place team in action. I told advisors that I met in Kansas City to enjoy the experience. I know too well the difficulty of staying on top!”

When you decide to “take a load off” by resting your body on a stool, do you want to rest on a rocky bench that might cause you to either slide off or to force you to exert extra energy to continually stabilize yourself? A stable three-legged stool provides support through careful construction of each leg of the stool. A well-constructed stool provides a solid foundation to rest upon. If one leg of the stool is shorter than another, sitting on the stool provides an unstable, rocky experience.

Likewise, for financial stability during retirement, it is important to consider three elements regarding Social Security filing. Three things that a married couple should consider prior to filing for Social Security benefits are:

1. Waiting until one spouse turns age 70
2. Coordinating spousal benefits
3. Maximizing surviving spouse benefits

It is critical that married couples view Social Security as a joint lifetime benefit. Filing too early can result in a reduced benefit. As Social Security provides surviving spouse benefits, this will affect not just one person’s life, but the lives of two people.

Intrigued? Perplexed? Wondering exactly how much income can be gained or lost by following the best strategy? Answering these questions is not easy. Each couple’s financial situation is unique. Learning how to analyze a particular couple’s financial situation and making filing recommendations relative to the complex Social Security regulations takes training and forethought. Learn more about the issues to address prior to making client filing recommendations by visiting NSSA Certification.