In our first segment on Social Security, published in the LEWA September 2019 blog, we looked at the history, purpose and ongoing challenges of Social Security and the important decisions facing retirees regarding when to start receiving benefits.

In addition to increasing the Social Security monthly income benefit by simply waiting to start benefits later, there are additional strategies and consideration to be aware of that can help to further maximize total lifetime benefits. Specifically, rules involving the spousal benefit option create important timing and coordination decisions, especially for spouses who have a wider income or age gap, are widowed, or have ex-spouses to whom they were married to for at least 10 years.

Recently, changes were made to certain provisions of Social Security, as part of the Bipartisan Budget Act that went into effect in 2016, that directly curtailed and limited certain options available under Spousal Benefits. Benefits can no longer be “Filed and Suspended” to allow one spouse to collect a spousal benefit based on the other’s earnings record while delaying the start of their own benefits, thus maximizing benefits by receiving delayed retirement credits. Another related strategy, the Restricted Application, was also limited, but individuals who were born before Jan. 2, 1954 still have the option to utilize this spousal benefit strategy.

Removal of the File and Suspend strategy and additional limitations on the Restricted Application option created a challenge for pre-retirees who were relying on the increased lifetime benefit that these strategies afforded. In some cases, previous retirement date targets had to be moved back due to the lowered lifetime benefit available after these changes went into effect.

Whether your situation involves the spousal benefit strategies mentioned above, or if you are just starting to think about your Social Security options, we are here to help provide advice, guidance and our expert analysis. In addition to various projection tools and reports we make available to our clients, we also have a free Social Security e-guide, which you can receive by completing our request form online.

Keep an eye out for additional blog segments, workshops and educational resources that we will be releasing throughout the remainder of this year and beyond.

Shar Gogerdchi, CFP®

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