My Comments: Social Security has for many years been a critical financial component in the lives of almost every citizen of the US who is aged 62 or older. I know it is for me and my wife.
Changes are going to happen to help maintain it’s viability as the population demographics change and society evolves. What you read below may confuse you, but if some of the variables described apply to you, you need to understand this rule change as it could mean lots of money for you, both good and bad.
Philip Moeller February 18,2016
Q: I plan to file for Social Security in November 2016. I will turn 66 on November 24, 2016, and my wife will turn 66 on February 24, 2017. We had planned to have my wife file a restricted application for Social Security as of February 2017 and, at age 70, switch to her retirement benefit. In consideration of changes to the law, will this option still be available to us as of February 2017? — Ken
A: Yes, this strategy will still be valid under the new law. Because your wife was already 62 at the start of 2016, she is grandfathered under the new regulations. Once you’ve filed for your benefit, she will be able at her full retirement age (FRA) to file a restricted application just for her spousal benefit and then at age 70 file for her own retirement benefit. Assuming it will be larger than her spousal benefit, she should receive an additional payment that is roughly equal to the amount by which her retirement benefit exceeds her spousal benefit.
Under the old rules, you would have been able to file and suspend at your FRA. That would have permitted her to file a restricted application and allowed both of you to defer your own retirement benefits and thus earn delayed retirement credits. The ability to file and suspend will no longer be provided to people who have not reached full retirement age by the end of April (April 29, to be exact, which is the last business day of the month).
These new changes add yet another layer of complexity to what was already a challenging set of Social Security claiming decisions. And wishing the system were simpler won’t make it so. Still, by asking the right questions, as Ken has done, it’s still possible to arrive at the best outcome.