The Social Security maximization game has changed. Odds are that the optimal strategy for many of our married clients has changed due to recent changes to Social Security laws. Before this law went into effect, you could guess, with remarkable consistency, that the optimal strategy was for one spouse to File and Suspend benefits and for the other spouse to file a Restricted Application. Restricted Application is when someone applies for half of their spouse’s benefit only, while delaying his or her own benefits to allow them to grow. However, the combination of these strategies is no longer available for most clients. As a result, analyzing your Social Security maximization strategy is more important than ever before.
In response to House Resolution 1314 – The Bipartisan Budget Act of 2015, below are some changes to Social Security maximization strategies:
For clients born after January 1, 1954:
- Restricted application is no longer an available strategy.
For clients born after May 1, 1950:
- The File and Suspend filing method is no longer an available strategy.
For clients born on or before May 1, 1950:
- The File and Suspend filing method is available for those currently receiving benefits.
- File and Suspend will remain as a filing method for future strategies until 5/1/2016.
If you are 66 or turning 66 by May 1, 2016, there may be an advantage to filing and suspending your benefits.