Life after the passing of the Bi-Partisan Budget Act of 2015

Over the past two years, the U.S. Social Security Administration has been making changes from mailing out Social Security statements to the Bi-Partisan Budget Act of 2015. The passing of the Bi-Partisan Budget Act of 2015 includes a section to close “unintended loopholes” mainly dealing with two Social Security strategies.

As of September 2014, Social Security statements are now mailed out every 5 years, beginning at age 25 to those who are not receiving Social Security benefits. This statement provides important information and should be reviewed yearly.   There are no procedures in place to ensure that your statement is accurate, other than your review.  Did you know that after 3 years it may be harder to have an error corrected and the error may not even be able to be corrected?  You can sign up for online access to receive and review your Social Security statement at www.ssa.gov.  A my Social Security account can eliminate having to stay on the phone or stand in a line for hours.  For example, you can: check your earnings statement, sign up for Social Security, sign up for Medicare, etc.  A my Social Security account it’s quick and free.

With the passing of the Bi-Partisan Budget Act of 2015 some of the more beneficial planning strategies for claiming Social Security benefits were changed.  The “file-and-suspend” strategy would have ended as of the end of April 2016.  However, the “restricted application” strategy is still in place for select individuals attaining age 62 prior to end of December 2015.  The “restricted application” method allows an individual to file for Social Security benefits from a spouse and defer claiming on the worker’s own record.  This allows the individual’s own Social Security to continue to grow gaining the deferred retirement credits of 8% a year.  Based on the full retirement age, this could allow the monthly Social Security amount to grow up to an additional 32%.  This would differ based on the exact months of applying, the full retirement age, etc.  The “restricted application” method is a great planning strategy for those who are still qualified.

With the ending of the “file-and-suspend” strategy and the gradual ending of the “restricted application” strategy, planning for claiming your Social Security can help to maximize your benefits received. If you turned 62 prior to the end of December 2015 and have not filed for Social Security, you still have the option of using the “restricted application” strategy.  With some additional information we can compare your planning strategies. Contact Brian Leedy, CPA or Suzan Ross, CPA, PFS, CGMA at 1-866-287-9604 to discuss your available strategies.

Posted by Brian Leedy, CPA