Currently, a married person- typically the higher wage earner in a couple- who's at least full retirement age can file for his or her own social security benefits and then suspend it and allow their spouse to collect spousal benefits until 70 My question is can I do this if I am already collecting social security. Im 66 Thanks
Stephen, If you started collecting your benefits you can suspend your benefits until age to allow them to grow. Your spouse can take their spousal benefits on your earnings record if they have reached Full Retirement Age (FRA).
Under the budget act of 2015, which was signed into law Nov. 2, 2015, this strategy will no longer be available after April 30th. Under the new law, if you will reach your FRA before April 30, 2016, you have until then to file-and-suspend. After April 30, 2016, no one will be able to initiate a new file-and-suspend claim. Spousal and children's claims on the records of those who have already filed-and-suspended and those who do so at their FRA before April 30, 2016, will continue to receive benefits. Individuals must reach their FRA and complete their file and suspend by April 30, 2016, in order to be eligible for future reinstatement of benefits if they change.
If you have already started collecting your own benefit, you are not able to switch to start collecting your spousal benefit. If you are collecting your own benefit, your spouse (who is at least full retirement age) can still file a restricted claim for spousal benefits as long as he/she has not already started collecting his / her own benefit. This "loophole" is being closed in coming months/years by the recently passed budget act, but filing restricted claims for spousal benefits only is still permitted for a short time longer. After March 2016, it will be required that the first spouse be collecting (not suspending) their benefits. For those turning 62 after 2016, you will no longer be permitted to switch from spousal to your own benefit.
The new law just passed as a budget deal has some transition periods built within it.
Those over the age of 62 by the end of 2015 can file a restricted application at Full Retirement Age (FRA), but may not file and suspend after April 2016. Until the end of April 2016, at FRA, one can file and suspend, or suspend if already having filed, to allow spouse to claim their spousal benefit. Until the end of April 2016, anyone can file a restricted application for their spousal benefit. After April 2016, no file and suspensions – spousal benefits cannot be claimed on a benefit suspended after April 2016. Through 2019, anyone turning FRA can file a restricted application for spousal benefits, but the spouse on whose record the spousal benefit is being paid must also be receiving their benefits, i.e., no suspension. Anyone over 62 by the end of 2015 will be able to file a restricted application for spousal benefits when they turn FRA over the next 4 years (end of 2019).
Anyone may continue to suspend their benefits after FRA for any reason at any time even under the new law. A common reason now would be to gain the Delayed Retirement Credit (DRC) increases in benefits for more income for the retiree or survivor. Spousal benefits will no longer be paid on a suspended benefit. So, a restricted app can be used over the next 4 years, it cannot be combined with suspensions after April 2016.
Thus, it becomes very important to understand at what age you and your spouse are by the end of this year. It takes a couple of reads through of the rules to see how the rules may apply and it is definitely situation specific.
Thank you for asking a great question that a lot of people are asking after recent changes to the law.
As noted from the great responses above, your window of opportunity to execute a file and suspend strategy is quickly closing. You will want to consult a professional to run an analysis to look at all of your options.
I fear that by simply using an online calculator you won't adequately account for taxes, adjustments to your investment allocation and estate planning issues that could come as a result of your filing option.
I would encourage you take a holistic approach to analyze what options are available to you. There are several great advisors who can assist you in Richmond or Northern Virginia.
Due to the recent budget deal that President Obama signed into law, the File-and-Suspend strategy for your Social Security is now eliminated. However, there is a 6 month window in which some may be able to take action to preserve these strategies.
If you and your spouse have already started your Social Security benefits, the new rules will not affect you.
**If either you or your spouse is turning or already turned 66 in the next 6 months, you can still use both of these strategies as long as you and your spouse reach full retirement age in the next 6 months (by April 30, 2016). File-and-Suspend as soon as you hit full retirement age.