Social Security Changes for 2015 | November 2015

Thank you sitting down with me to read a few thoughts about investing. For the last two months, we’ve discussed aspects of having a financial plan; you can find those columns on our website at alleninvestments.com. You can also find bio information for our advisors, including my co-writer this month, Dana Hurley.   Dana is very astute regarding social security issues and how they relate to your overall financial plan.

The first question about Social Security is usually, “Will it be there for me?” Most experts predict that it will be…in some form. They expect today’s social security benefits will probably be paid to Americans that are now age 50 and older, but workers age 50 and younger will receive lower payouts and have to work longer than today’s retirees.

The newest question we hear is, “What does the recent Social Security legislation mean to me?” Dana does a great job of shedding light on that confusing topic:

“On Monday, November 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015. Among its provisions are changes that shut down two popular Social Security claiming tactics: the-file-and-suspend and the restricted-application strategies. 

Section 831(a) has ended the ability for individuals born on January 2, 1954 or later to file a restricted application. 

What this means for you: 

If you are 62 or older by the end of 2015, you will be able to file a restricted application for your spousal benefit once you reach full retirement age and allow your retirement benefit to grow until you reach age 70.

If you are not 62 or older by the end of 2015, you will not be able to employ this strategy.  When you go to file for your benefit, the social security administration will pay you the amount of your benefit or 50% of your spouse’s benefit (whichever is greater).  You will not have the ability to collect a spousal benefit and delay your own benefit. 

Section 832(b) has ended the ability for individuals to file and suspend their benefits.

What this means for you:

If you were born on or before May 1, 1950, you need to contact the social security administration to file and suspend your benefit if you have not done so already.  Those individuals who file and suspend before April 30, 2016 will be grandfathered into the old rules.  By filing and suspending your benefit, you will allow for your spouse to file a restricted application for his/her spousal benefit (at full retirement age) and receive that benefit while you delay your benefit.  If you do not file and suspend by April 30, 2016, you will have to file and collect your benefit in order for your spouse to receive his/her spousal benefit.

If you are born after May 1, 1950, you will not be able to employ these strategies.  In order for your spouse to collect their spousal benefit, you will have to collect your benefit.”

So there you have some facts and figures, as well as some speculation and ideas. And while I’m not sure about you, talk about Social Security leaves me feeling a bit down, even blue. I’m not sure why, perhaps it is because I spend more time worrying about the loss of it than the security of it.

Let’s step back together, though, and gain a little perspective in this season of Thanksgiving. While it is a troubled world and country, we also have blessings and riches in America beyond what we can count. So give a little extra of yourself this season to those in need, and give thanks along the way.