If you have been following the latest federal budget news, you may know that the popular file-and-suspend strategy in Social Security will be removed from the list of filing options starting May 1, 2016. You still have time if you are considering the strategy and may want to review a few details surrounding the option. If you or your spouse are between the ages of 65.5 and 70 and have not filed for Social Security benefits yet, it is essential to review your plan and connect with your advisor immediately to avoid missing out on additional benefits. A few points to consider:
- You can still voluntarily suspend your benefit until age 70 and receive a benefit increase of approximately 8% per year.
- There is no change to those who have currently implemented the file-and-suspend strategy or who will begin prior to May 1, 2016.
- Clients younger than age 62 on December 31, 2015 will no longer have the option to choose between a spousal benefit or their own Social Security benefit. The benefit received will default to whichever option is the greater amount.
- Clients who suspend benefits after May 1, 2016 will also suspend any spousal or other family benefits.