The new budget deal approved at the beginning of November virtually eliminated some claiming strategies that many were planning on utilizing in order to maximize their Social Security benefits.  Mainly, the file and suspend strategy and the option to restrict Social Security claims to spousal benefits have been eliminated for but a small group of people.

The next six months and the next four years offer opportunities to those in 1953 or earlier.

Now is the time to figure out if you can still take advantage of these valuable claiming strategies before they are shut down.  There are now three sets of rules:

Those who are or will turn 66 by May 1, 2016 (approximately)

They will still be able to take advantage of the file and suspend strategy under the old rules.  This means they can file for benefits and then immediately suspend them in order to trigger benefits for a spouse or dependent child while their own benefits continue to grow at 8% per year up to age 70.  Those who do this will also retain the right to request a lump sum payout of their suspended benefits any time up to age 70 in lieu of earning the delayed credits.

(Anyone who has already filed and suspended will continue with their plan as originally allowed.)

Those who turn 66 after the May 1, 2016 deadline

They can still file and suspend, but family members will no longer to be able to collect on their record.  They will only be able to collect if the primary person is also collecting benefits.

Those who turn 62 by December 31, 2015

This group will be permitted to claim just spousal benefits when they turn 66 if their spouse have either claimed benefits or have filed and suspended before May 1, 2016.  Anyone who turns 62 after this date will lose the right to claim spousal benefits only.  They will be subject to ‘deeming’ rules through age 70.  This means if they are entitled to benefits on both their own record and their spouse’s record, they will be forced to file for both at the same time and be paid the higher of the two.  For many married couples, this means the usually smaller spousal benefit will never be paid.

Surviving spouses who have also earned their own benefits will retain their right to choose when to claim their benefits, electing one benefit first and then switching to the other benefit later if it results in a bigger benefit.

In light of these changes, there are opportunities.  Look to be educated in your Social Security claiming strategies.

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Andy Paladino is an investment adviser representative of, and securities and advisory services are offered through, USA Financial Securities Corp., Member FINRA/SIPC. A Registered Investment Adviser located at 6020 E. Fulton St., Ada, MI 49301. Paladino Financial Group is not affiliated with USA Financial Securities.

Andrew J. Paladino, CPA, MSF is authorized to transact securities related business and investment advisory services only in states where he is properly registered. For investment products and services these states include: AZ, CA, CO, CT, DC, DE, FL, KY, MA, MD, MN, NC, NM, NY, OH, PA, SD, TX, VA, WA and WV. For investment advisory services these states include:AZ, CA, DE, FL, MD, MI, NC, OH, PA, VA, WA. This website is not intended to provide investment, legal, or tax advice, nor to effect securities transactions or to render personal advice for compensation.

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