ó If you are married, and you or your spouse will soon
be 66 years old, you might be able to increase your
Social Security by thousands of dollars, but thereís a
catch: A popular strategy known as "file and
suspend" will be shut down for new participants
after April 29. As people rush to file paperwork before
the doors close, Social Securityís field agents are so
confused by the process they are mistakenly turning
people away who should be eligible.
strategy is a way for couples to collect some Social
Security in their mid-60s while waiting to get bigger
payments as they approach age 70.
strategy has been a favorite among savvy financial
planners for clients near or in retirement because it
increases retirement income significantly for couples.
For affluent people, the strategy can mean about $60,000
in extra Social Security, said Laurence Kotlikoff, a
Boston University economics professor and president of
planner DeDe Jones, of Lakewood, Colo., said sheís
been struggling to claim the benefit for a couple who
could get $30,000 more in Social Security using the
strategy. A Social Security agent in a Colorado office
told the couple they didnít qualify, but they should
have qualified, Jones said.
people Ďnoí seems kind of illegal," Jones said.
"They are denying people benefits to which they are
complaints are widespread among advisers helping clients
with Social Security claiming strategies.
is rampant confusion in Social Security offices,"
said Russell Settle of SocialSecurityChoices.com.
offices are attempting to implement changes that were
incorporated in the Bipartisan Budget Act of 2015 after
file and suspend was criticized as a benefit for the
rich. Kotlikoff at the time challenged the law, pointing
out that by aborting file and suspend, low- and
moderate-income spouses and divorced women wouldnít
get a necessary boost in retirement money. Recently, he
has been blogging on the mistakes Social Security
offices are making as they turn away people who should
qualify before April 29.
getting numerous complaints from advisers and
individuals throughout the U.S. during the past few
weeks, the Social Security administration issued a
statement Feb. 24 to better inform its agents. A Social
Security spokesman said the administration will be using
interactive videos this month to train staff on the new
file and suspend, when a person in a marriage turns 66,
he or she can claim Social Security but then ask to hold
off on getting paid benefits. Itís usually a husband.
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.
spouse can claim spousal benefits at age 66 as long as
he or she was at least age 62 on Jan. 1, 2016, and the
couple starts the process with file and suspend and a
"restricted application" before the deadline
spousal benefits coming regularly to one spouse, a
couple has some Social Security income while they wait
to claim their full Social Security benefits years
later. Each year they wait after age 66, the benefits
increase about 8 percent ó a large number that
financial planners point out is more than an investment
can guarantee. If they wait until age 70 to draw their
full Social Security benefits, those benefits will be 32
percent greater than if they started getting the
benefits at age 66.
either spouse is eligible to claim spousal benefits,
usually itís the one whose earnings over a lifetime
tend to be smaller. Letting the higher earnerís Social
Security benefits grow until age 70 provides the
greatest advantage. As time goes by after filing for
file and suspend, a couple can decide they need Social
Security before age 70 and can change their mind about
waiting. But their monthly payments will revert back to
age 66 levels, Kotlikoff said.
common mistake in Social Security offices has been to
tell couples that a spouse canít get the spousal
benefits under file and suspend unless someone is 66 on
April 29. Yet, while the person suspending Social
Security must be 66, the spouse can be 62 as they start
the process. To qualify, the spouse should have been
born in 1953 or earlier, Settle said.
getting phone calls every day," he said.
who used the file and suspend practice previously, or
gets in under the wire by April 29, will be able to keep
making use of the provision. And in the future, any
individual will still be able to wait up to age 70 to
start collecting his or her own Social Security. Waiting
just wonít allow the spouse, who didnít meet the
1953 birthday cutoff, to get spousal benefits while
allowing his or her own Social Security to get larger as
hard for a normal person to figure this out, and itís
unfair to send a person to battle the bureaucracy,"
than dealing with field offices, she said people should
do file and suspend and a restricted application on the
SSA.gov website. In the remarks area of the application,
she said, people should "explain what they are
trying to do." Her hope is that a written
application will be reviewed internally by people
well-versed in the law, and by filing online the couple
can prove that they met the April 29 deadline.