The Old Strategies and What Has Changed
File and Suspend. Under this strategy, at full retirement age (FRA) Spouse A files for benefits and immediately suspends them. Spouse A can continue working (they don’t have to) and their suspended benefits continue to increase by as much as 8% per year until age 70. Restricted Application for Spousal Benefit. Under this strategy, Spouse B files a restricted application for spousal benefits and can collect as much as 50% of spouse A’s benefit while their own benefit continues to accrue delayed retirement credits based on their own earnings. Spouse B’s benefits would also increase by as much as 8% per year until age 70. Coupled together, these strategies allowed both individuals to take advantage of delayed retirement credits, which increase earned benefits by as much as 8% for both of them each year in which they defer claiming between FRA and 70. It also provided one spouse some the two most used and getting the most attention.
Who Is Impacted
These changes impact anyone that will be eligible for social security at some point in their life. However, it is of particular importance to certain people. There is a six month delay before the strategies are eliminated. If you have already filed and suspended and your spouse is collecting the benefit, you are grandfathered and your benefits will not change. If you are not at retirement age, but you have incorporated this strategy into your financial plan, you should contact your financial advisor and update your retirement plan to account for the reduction in Social Security benefits.
We Are Here To Help
When it comes to social security, every person’s individual circumstances are different and this is only a brief overview of some of the changes to the claiming strategies. If you do not have a financial advisor, financial plan, haven’t even begun to consider your Social Security options, or you just want a second opinion, Monroe’s Wealth Planning and Advisory experts are here to assist you. If you would like to discuss your particular situation please contact 888-466-8287 or stop into a branch to schedule an appointment.
*This material was written by Monroe Bank & Trust Wealth Planning and Advisory. It has been prepared and is published solely for informational purposes. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances.