The following blog post from SC&H Financial Advisors, Inc., discusses new federal rules that are dramatically impacting the strategies two-income couples may deploy to maximize Social Security spousal benefits.
In November 2015, President Obama signed into law the Bipartisan Budget Act of 2015, which eliminated two major Social Security claiming strategies allowing married couples to maximize their benefits. The most significant change was the elimination of the file-and-suspend strategy.
The option to file and suspend will end as of April 29th, which is the effective date of Social Security changes contained in the Bipartisan Budget Act of 2015. In addition, file and suspend is not the only strategy being eliminated. The option for a married person to file a restricted application just for spousal benefits is also going away.
According to this NASDAQ article, if you will reach, or have reached retirement age by April, now is the time to evaluate if you want to file and suspend before you lose the opportunity to do so.
The SC&H Financial Advisors team is offering the following recommendations to help best take advantage of these new federal rules.
- If you will be age 66 by April 30, 2016, you can still use the file-and-suspend strategy to allow your spouse or eligible child to file for benefits, and also increase your future benefits.
- Even if you aren’t eligible for this strategy, it may still make sense to delay receiving Social Security benefits past your full retirement age. For each year you delay – up to age 70 – your benefit will increase by 8 percent.
- There may still be planning opportunities available if you and your spouse both have an earnings record.
If you would like more insights into how to best manage these Social Security changes, please contact the SC&H Financial Advisors team here.
Securities offered through Triad Advisors, Inc. Member FINRA, SIPC. Investment Advisory Services offered through SC&H Financial Advisors, Inc. SC&H Financial Advisors, Inc. and Triad Advisors, Inc. are unaffiliated entities.