What You Can Do

With unprecedented reforms coming to Social Security benefits, time is of the essence to take advantage of both the “file and suspend” and “restricted application” strategies if you can.

File and Suspend: If you will be 66 years or older by May 1st, 2016 and you have not started your social security benefits, you may wish to consider “filing and suspending” your benefits before the May deadline. Here’s an example: Mark is 66 and his wife, Maggie is 61. Maggie didn’t work enough to qualify for her own Social Security benefits, but has planned to take benefits based on Mark’s work history. Mark wants to wait until he is 70 to claim his benefits, but Maggie wants the option to claim Mark’s benefits when she turns 62. Mark should then “file and suspend” his Social Security benefits between now and May 1, 2016, so Maggie can file a claim for spousal benefits. If Mark waits until after May, Maggie must wait until he turns 70 to claim any benefits.

Restricted Application: Under the new law, those born on or after May 2, 1950, but before January 2, 1954 can still do a restricted application. This will allow you to collect only a spouse’s benefits, while your own continue to grow until you reach age 70. Here’s an example: Kim is 66, has been divorced for over 10 years, and never remarried. She wants to file on her ex-husband’s Social Security benefit and allow her benefit to continue to grow. Currently, she can file a restricted application and receive just the benefits on her ex-husband’s employment record while not touching her own and allowing it to grow.

Now that these Social Security reforms are going to become law, do your homework! A qualified financial professional can help you explore your options, alleviate confusion, and help to maximize your benefits based on your age.

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