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For those individuals who were fortunate to save enough money so as to no need Social Security Retirement benefits immediately upon reaching age 62, the rules for maximizing your benefits have changed.  There were two strategies routinely utilized for this purpose which have been eliminated by Congress so as to conserve funds in the Social Security Retirement Trust Fund.

The “file and suspend” strategy in which you would married couples could maximize their benefits has been eliminated.  Prior to 11/2/15, a lower earning spouse could claim 50% of the higher earning spouse’s benefit when the higher earning spouse filed for benefits and suspended payment, allowing that benefit to accrue 8% per year until taking it by age 70.  The new rules now state that when the higher earning spouse suspends benefits, the benefits to the lower earning spouse are suspended as well.  Thank you, Congress.

The “restricted application” strategy has been ended.  This was utilized for spouses earning similar incomes.  This allowed one spouse to file a restricted application for only spousal benefits, allowing the filer to grow their benefits at 8% per year until age 70.  Now, the filer is deemed to have filed for individual and spousal benefits.  Thank you again, Congress.

So what to do now?

The best strategy now is for the lower earning spouse to claim their benefit at age 66 while the higher earning spouse waits until age 70 to collect maximum benefits allowed.  Then, once the higher earning spouse has claimed the highest benefit, the lower earning spouse should claim the spousal benefit.

The new rules do not affect survivor benefits which allows these individuals to switch from survivor to individual benefit receipt.  These persons can receive the survivor benefits while allowing their individual benefit to accrue at 8% annually until age 70.

The new rules also do not affect persons who have reached age 62 by the end of 2015.

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