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Planning Discussions - Social Security Changes

Wealth & Pension Services Group
William Kring, CFP, AIF - Chief Investment Officer


Social Security Changes Coming Soon

A new congressional budget agreement just announced will effectively end two key social security claiming strategies available to couples. 

Apparently, congress views these sophisticated "file and suspend" claiming strategies as loopholes left over from a law passed over a decade ago. These approaches allow some married couples to generate more lifetime benefits than if filing under traditional rules. For now, it looks as though there will be some "grandfathering" for those age 62 and older as of this year, according to the Wall Street Journal. The law change could go into effect in six months, although I wonder if the Social Security Administration can be ready by then. Still, this is a big deal for many couples, and for their financial advisors, as their social security income options are now limited.

Here is an example of how it works. An individual who has reached their normal retirement age can file for benefits and then simultaneously suspend them. This allows the person to file for spousal benefits, while letting their own benefits increase for future use at age 70. The age and benefits of each person, as well as life expectancy, dictate how benefits can be maximized using this approach.

The strategies are complicated and difficult to model, but new software has made it much easier to evaluate these options. As a financial advisor, and a future social security recipient, I will be sorry to see these eliminated.

For more articles and information about social security, click here.

As always, please feel free to contact us with any questions you may have.


William Kring, CFP®, AIF®
Chief Investment Officer

Source: Wall Street Journal

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