Social Security Planning Has Fewer Strategy Options After April 30, 2016

On April 30, 2016 two little understood, yet very powerful benefit maximizing strategies that have been available to Social Security claimants since 2000 will disappear.

Currently, an individual can begin to receive a reduced Social Security benefit at age 62. An individual who delays receiving Social Security benefits can realize an increase in benefits all the way to age 70. Waiting until age 70 can result in as much as a 32% increase in Social Security benefits.

The major financial incentive to delay claiming Social Security benefits led to two strategies for married seniors to maximize their Social Security benefits. These strategies are:

1. File and Suspend which allows higher income spouses to claim Social Security benefits and immediately suspend them to maximize their future benefit while the lower wage earning spouse takes advantage of a spousal benefit, and

2. Restricted Applications which allow one spouse to receive a spousal benefit based on their spouse’s Social Security application while delaying their own application to maximize their individual Primary Insurance Amount.

The loss of these power tools is a hardship to many older adults who planned to rely on Social Security benefits for regular income after retirement. With greatly reduced benefits available, those considering retirement will need to rethink their wealth management strategies and, if necessary, remain in the work force longer to maximize retirement savings. Since the retirees already have fixed incomes, surging real estate and other taxes putting financial pressure on them, we feel that the Social Security Administration and Congress should reconsider eliminating these current spousal benefits.

Signed,

Nick Beis

Attorney

Wilson and Wilson Estate Planning and Elder Law LLC

La Grange, Illinois