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It’s a little known fact, but there are hundreds, if not thousands of options for how, and when to claim Social Security benefits.  One of the most valuable strategies for couples, called “file and suspend” will be ending in six months.  If you are 62 or older at the end of 2015 you’ll want to take action now.  For the rest of us – time to look at our retirement portfolio. 

What is File and Suspend?

For married couples, a spouse cannot claim a spousal benefit until the worker applies for Social Security benefits.  Right now, a worker can apply for his or her Social Security benefits, and then suspend them.  That way, the worker can continue working, but the spouse can receive the spousal benefits.  While the worker continues working, they receive increasing retirement credits.

What is Changing

The new budget act, passed by the Senate early last week, includes provisions ending the “file and suspend” strategy.  For a worker turning 62 in 2016, when a worker files for social security benefits, he or she won’t have the option to suspend the payments, and let them continue to grow.  The spousal benefits and the workers benefits will be paid out at the same time. 

The other thing that is changing is the “claim now, claim more later” strategy that allowed the high-wage earner to claim spousal benefits, continue working, and then claim their full, and higher social security benefits at age 70. 

For a summary of the changes, and how they’ll effect you, check out “Advisers rethink retirement plans amid Social Security changes” in Investment News.

The Bottom Line

The important thing to realize is that if you’re turning 62 before the end of the year, you should talk to a qualified financial advisor about your social security options to see what strategies may be best for you.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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