Social Security Winners and Losers

If you are at least 62 by the end of 2015 you are a winner!  Everyone else, not so much.

As part of the budget agreement passed by the Senate and House of Representatives and signed by President Obama “loopholes” in Social Security rules were closed.  These “loopholes” included the ability to file and suspend and the ability to file restricted claims for spousal benefits only were eliminated for those of us younger than 62.

By extending the concept of ‘deemed’, younger workers who file for benefits will receive the larger of their spousal benefit or their benefit based on their own earnings record at the time of filing.  You will still be able to delay claiming your Social Security benefit beyond your normal retirement age and accrue addition credits, but the ability to draw a spousal benefit while allowing your own benefit to accrue delayed credits was nixed for the vast majority of Americans.

If you are among the winners in this legislative lottery be sure you think carefully about your Social Security claiming strategy.  You could increase your lifetime benefits by many thousands of dollars. You can still use the ‘restricted application’ to collect benefits based on your spouse’s earnings record while allowing your own benefit to earn delayed payment credits of about 8% per year.  The rules are complex, but they are certainly worth learning.
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For the losers, the rules are simpler and less generous, but there are still choices that can mean more money for married couples in some circumstances.