InvestmentNews reported that a budget agreement by congressional leaders and the White House would end popular Social Security claiming strategies. Once it becomes law, it could cut off payments for beneficiaries, according to those familiar with the deal.
According to the article, the legislation contains several entitlement reforms. One of them would end the ability of a Social Security claimant to file for his or her benefits and then suspend receiving them while he or she collects benefits for a spouse, known as file-and-suspend. Such an approach can boost payouts. The bill also would restrict claims for spousal benefits and would affect people who turn 62 in 2016 or later.
The measure “closes several loopholes in Social Security’s rules about deemed filing, dual entitlement and benefit suspension in order to prevent individuals from obtaining larger benefits than Congress intended,” states a summary of the bill.
If the plan is approved by the House and Senate, payments related to file-and-suspend strategies will end within six months of the budget bill being signed into law.
The legislation also would place a surcharge on high-income recipients of Medicare, which will be costly for wealthy beneficiaries.
As part of AAII’s ongoing discussion of financial planning, it often covers Social Security strategies:
- Social Security: Delay Benefits at the Expense of Personal Savings?
- Social Security Strategies for Couples
- Social Security Strategies for Singles
- Social Security Basics
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