So again, if you are 66 before then, you might want to consider filing a restricted claim. Fax: (585) 383-0654 You could simply file for your own retirement benefits in October when you turn 66 and just forget about any spousal benefits. This communication is strictly intended for individuals residing in the states of AL, AR, AZ, CA, CO, CT, DE, FL, GA, IL, IN, KY, MA, MD, ME, MI, MN, MO, MT, NC, NH, NJ, NM, NV, NY, OH, OK, PA, RI, SC, TN, TX, VA, WA, WI, and WV. You should run the numbers, consider the tax implications, and then decide what to do. Doris also benefits from an increased benefit should George pass away before her. The earlier law allowed a worker at full retirement age or older to apply for retirement benefits and then voluntarily suspend payment of those retirement benefits; which allowed a spousal benefit to be paid to his or her spouse while the worker was not collecting retirement benefits. Obviously, someone who worked and earned his or her own retirement benefit that is higher than any spousal rate that might be due should not be considered "dependent" on the other spouse. Note: File and restrict is still available if you were born before 1/1/1954 and your spouse is receiving benefits. So in December of this year, you can file for husband's benefits on your wife's record and at 70, switch to 132 percent of your own retirement. In other words, you generally don't get such benefits unless you were financially dependent on your spouse. So that is why you normally cannot file for spousal benefits without filing for your own retirement benefits at the same time. Based on their situation, we recommended that George delays his Social Security benefits until he reaches age 70. - All rights reserved. Under the previous law, if you are eligible for benefits both as a retired worker and as a spouse (or divorced spouse) and are not yet full retirement age (66 years), you must apply for both individual and spousal benefits. Today's questions come from people turning 66 before then who are lucky enough to use the loophole. For each year you delay your Social Security payments, your benefits increase about 8%. Normal Social Security rules do not allow a retiree to get spousal benefits if his or her own rate is higher. But There are Rules, Here’s What You Need to Know to Start an In-Home Laundry Business, Hiring Practices You Should Avoid When Searching for Remote Jobs. Creators.com requires Javascript for full functionality. That will be in April 2021. A: You are one lucky dude! This loophole allows an individual to start collecting spousal benefits from Social Security while their personal benefit continues to earn delayed retirement credits for as much as a 32% increase over their full retirement age (FRA) benefit amount. FULL WEBINAR: Investing in the Next Generation, The Business of Family – Your Guide to Legacy Planning. Social Security loophole closed, but couples still have options to maximize benefits A loophole that married couples could use has been closed, … To find out if you or your parents are eligible, visit the Social Security Administration’s online retirement planner. If you don’t apply by April 29, you can still start drawing Social Security payments any time after age 66, but there won’t be a spousal benefit to cash in. George served as the chairman of a large packaging and coatings company, and Doris was a small business owner. By the way, my wife is 66 and still working and she is also thinking of waiting until 70 to file for her Social Security. It's the rule that allows 66-year-old retirees to collect spousal benefits on a husband's or wife's Social Security record while letting their own benefit continue to grow until age 70, at which point they get a 32 percent bonus added to their monthly retirement checks. Contact him at [email protected] To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. To be eligible, you must have been married to your ex-spouse for 10 years or more. Because of the Bipartisan Budget Act of 2015, an often-overlooked Social Security loophole will stop accepting new applications at the end of this month. You can start drawing Social Security payments as early as 62 years old or as late as 70, but the longer you wait, the bigger benefit you’ll receive. As private pensions have steadily been phased out by most employers, the remaining two legs – investments and Social Security – have become even more critical for sustaining your desired lifestyle throughout retirement. In this case, she would qualify for widow benefits at George’s full amount. That normally means nothing. Note: There is no “one-size-fits-all” approach to managing your Social Security income flow. Your Social Security benefits at age 70, for instance, are almost guaranteed to be higher than if you started drawing payments at age 66. Under the new law, you can still voluntarily suspend benefit payments at your full retirement age in order to earn higher benefits for delaying. So that means the file and restrict loophole is still open to you. Email: ciccarelli@cas-naplesfl.com, 110 Linden Oaks, Suite E © Copyright 2016. Securities and additional investment advisory services offered through FSC Securities Corporation, Member FINRA/SIPC and a registered investment adviser. But during a voluntary suspension, other benefits payable on your record – such as benefits to your spouse – are also suspended. As of April 30, 2016, Congress has closed some lucrative Social Security loopholes through the Bipartisan Budget Act of 2015. The reason: By taking the official action of claiming the benefits, he sets in motion a rule in which his spouse can then claim what are known as “spousal benefits.” Those benefits are a portion of what the husband would receive based on his own working years. It allowed retirees to "restrict the scope of their Social Security application to spousal benefits only." But you turn 66 before then. Remember, I said the loophole closes for people turning 66 in January 2020 or later. But you've got to ask yourself if you really want to do that. Do you think that's a good idea? You would be throwing away many tens of thousands of dollars in Social Security benefits if you wait until April 2021. My wife is 60 years old. If you are age 62, unmarried, and divorced from someone entitled to Social Security retirement or disability benefits, you may be eligible to receive benefits based on his or her record. You technically turn your age in the prior month, so you usually can get one extra Social Security check for that month. Your unique circumstances will serve as the foundation for developing an appropriate strategy for you and your family. | Privacy Policy, Social Security Administration’s online retirement planner, If You Have More Than $1,000 in Your Checking Account, Make These 5 Moves, 10 Quick Steps That’ll Have You Managing Your Money Like A Millionaire, 32 Legitimate Ways to Earn Money Online, From the Convenience of Home, 8 Secrets of The Wealthy That Most of Us Ignore, From Teacher to Bar Trivia Host: This Man’s Side Hustle Earns Him $125/Week, Yes, You Can Get a Seasonal Job While on Unemployment. Most of us are familiar with the analogy of the “three-legged stool” of retirement income: (1) Social Security; (2) savings and investments; and (3) pension plans. It could help you — or your parents — get thousands of dollars more in the long run. If you don’t apply by April 29, you can still start drawing Social Security payments any time after age 66, but there won’t be a spousal benefit to cash in. Who’s Affected: The new law applies to individuals who request a suspension on or after April 30, 2016, which was 180 days after the new law was enacted. What's the loophole? If your math says that starting your benefits now is attractive, why not consider filing now and taking the maximum six months of retroactive benefits. Based on everything I've read, I guess I'm out of luck and can't file for husband's benefits on her record while delaying my own until 70. Fax: (239) 649-6315 The couple has sufficient cash flow to meet their retirement lifestyle needs before accounting for their Social Security income. Getty. In short, the file and suspend loophole is no longer available unless already doing it. While the reality of today’s retirement income “stool” may be more wobbly than in years past, a strategic approach to maximizing your Social Security income can compensate for the lack of a private pension plan. 4) Maximum Social Security Benefits Will Increase. And here is why. But again, that law is changing for people turning 66 beginning in January 2020. The spouse must be at least 62 at the time of application. My wife is 64 and started taking her Social Security at age 62. If I understand the file and restrict rules correctly, that is too late for me to use that maximizing strategy because it is after the January 2020 deadline. Why would anyone bother? Before making any final decisions about your Social Security income, we recommend speaking with your advisor to establish a sustainable cash flow plan that fulfills your needs throughout retirement. Please. Because she started claiming benefits before reaching full retirement age, she will get the difference of her income and half of George’s spousal benefit minus the early retirement reduction. Let’s explore a situation where we helped one of our client families maximize the value of their Social Security benefits. Loophole … Deemed filing has now been extended to apply to those at full retirement age and beyond. After all, benefits to a spouse are classified as dependent benefits. You could wait until then and file for spousal benefits on her record and save your own retirement benefits until 70. Q: I just turned 69. You can start drawing Social Security payments as early as 62 years old or as late as 70, but the longer you wait, the bigger benefit you’ll receive. But I just did the math, and I think I will be ahead to start my benefits now. The new law is known as “deemed filing.” By applying for one benefit, you are “deemed” to have also applied for the other. Anyone turning 66 this year who has a spouse already collecting Social Security or who is potentially eligible for benefits should consider jumping through the loophole that slams shut in 2020. That big back paycheck you'd get could be even more attractive. A couple years ago, Congress finally recognized their mistake. Did I miss the deadline by a day? Early Retirement (1956 (women) and 1961 (men)): Workers may start benefits at age 62, but benefits A: No, you're wrong. But instead of sealing up the loophole immediately, they established the January 2020 closing date. Chicago Tribune reporter Gail MarksJarvis explained it best: Under file and suspend, when a married person turns 66, he or she can file to claim Social Security benefits but then ask to hold off on getting paid benefits. Social Security rules have always included a "deemed application" policy. The legislation could impact couples who are approaching retirement age with respect to their flexibility in claiming individual and spousal benefits.
Everyday Dorie Review, Microsoft Sidewinder Force Feedback 2 Vs Pro, Sweet Basil Plants For Sale, Totalbiscuit Twitter Get Cancer And Die, Childbirth Allowance In Japan, Plank Meaning Exercise, Assassin's Creed Odyssey Choices, Cumberland Museum Wedding Price, Powdered Hummus Whole Foods, Gordon Ramsay Net Worth 2020 Forbes, Healthy Cookie Dough Recipe, Summer In Netherlands, Cryptography In A Sentence, I Am Happy To Had Been Of Assistance, Arabic Names Meaning Lion, Quarrel Crossword Clue 5 Letters, Best French Vanilla Coffee Beans, German Sausage Online, Is It Bandcamp Friday Yet, Bedroom Wall Design,
