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Social Security

Social Security file and suspend strategy still works for some folks

Robert Powell
Special for USA TODAY
Anyone born Jan. 2, 1954, or later is no longer eligible to file a restricted application.

Q: I am almost 67 and have filed for and suspended my Social Security benefit. My wife will turn 66 in August 2016. Our plan is to have her file for spousal benefits at that time against my earnings record. She has not worked that much, and her own benefit is less than 50% of mine. Is that still possible with the recent law changes? — Ruediger Schmidt, Houston

A:  Yes, the file-and-suspend and restricted application strategies are still available for some married couples, but the clock is ticking. 
Those age 66 or older on or before May 1, 2016, can still file-and-suspend but they must do so on or before April 29, 2016, according to the provisions of the Bipartisan Budget Act (BBA) of 2015. In addition, those born on Jan. 1, 1954, or earlier can still file a restricted application when they reach Full Retirement Age (FRA). 
But some married couples are out of luck when it comes to the file-and-suspend and restricted application strategies. Those born on Jan. 2, 1954, or later are no longer eligible to file a restricted application. And those born after May 1, 1950, are no longer eligible to use the file and suspend strategy that was in effect prior to the BBA of 2015.
In your case, Mark Orr, a certified financial planner and author of Social Security Income Planning: The Baby Boomer's Guide to Maximize Your Retirement Benefits, says your plan is exactly what file and suspend is supposed to do. 
“It allows (you) to file for benefits — so (your) wife can get the full 50% spousal benefit at full retirement age since it's less than her own earnings record would provide — while your own Social Security grows by the 8% annual delayed credits,” says Orr.
A restricted application, according to 2016 Social Security & Medicare Facts published by The National Underwriter Co., allowed an individual who was at least full retirement age, who had not previously filed for any benefits, and whose spouse has established a filing date (and may have suspended), to file for only the spousal benefit based upon the spouse’s record. The “restricted” terminology indicates that the filing is not for their own benefit but for spousal benefits, which allows their own account to continue to grow.
The file and suspend strategy, again according to 2016 Social Security & Medicare Facts, allowed an individual who was at least full retirement age (currently 66 years of age) to file for his or her own retirement benefit and then immediately suspend receipt of those benefits until a future date up until age 70.
By way of background, under the BBA of 2015, some married couples and parents with dependent/disabled children can still take advantage of the file-and-suspend strategy. For instance, someone who was born May 1, 1950, or earlier can still file and suspend. But they must do so by April 29, 2016.

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