Since the enactment of the Bipartisan Budget Bill of 2015, much has been made in the public media of the imminent demise (on April 30, 2016) of the popular file and suspend technique. Meanwhile, the SSA was busy trying to wrap its bureaucratic head around the new regime and had little to say on the matter until well into February. For the most part, what all of this publicity has produced is CONFUSION!
The following email I received is a perfect example:
“I will turn 66 in June; my husband has already started taking his benefits. I was planning to take spousal benefits and wait till 70 to take mine, but the law has changed and my birthday is about a month after the cutoff date. This sudden change in the law is distressing and confusing. What should I do?”
This person was thinking about the April 29 deadline for file and suspend and misinterpreting it as applying to her intended strategy. Imagine her relief when she learned that she did NOT miss any deadline and it’s full speed ahead for her.
Then there are the conscientious people who watch the news, read articles, attend seminars, and then take a do-it-yourself approach to their Social Security planning:
“From the little bit I have read I believe that since I am 66 I have until the end of April to file and suspend. I think I will just go ahead and do it.”
It turns out that in his case, filing and suspending would be the worst thing he could have done – even worse than doing nothing and letting the deadline pass. The reason: it would have accomplished nothing positive for him and his wife, but it would have prevented him from employing the most helpful strategy available. This client picked up an extra $35,000 over the next 4 years as a result of following my advice and NOT using the file and suspend technique.
Finally the situation is further complicated by employees of the Social Security Administration who have not yet gotten up to speed on the new rules:
“I will turn 66 this November. I got divorced in 2006 after 18 years of marriage, never remarried, and intended to file for spousal benefits on my ex, who is 62. SSA told me I was out S-O-L because I won’t have turned 66 by April 29.”
It turns out he is NOT “out of luck.” Since he turned 62 well before January 1, 2016 he is free to claim divorced spouse benefits when he turns 66.
If you or someone you know is among the hundreds of thousands of people who are confused and/or clueless about their Social Security options, just fill out this social security questionnaire now to get things started. Don’t leave thousands of benefit dollars on the table!