April 14, 2016
David Littell

As most advisors are well aware, two Social Security strategies that have been used by married and divorced couples were recently eliminated. Each has a different grandfathering rule—the first expires at the end of April 2016. Beginning May 1, a worker will no longer be able to file and suspend benefits on or after full retirement age as a way to trigger spousal or other dependent benefits. After April, if a worker suspends benefits all other benefits payable based on that wage history will also be suspended. A second advantage of file and suspend that also goes away is the ability to ask Social Security to begin your benefits back when you filed and suspended—receiving a lump sum for the difference.

This means that any workers who have attained age 66 by April 30 who have not yet filed for benefits can file and suspend. This does not affect a lot of beneficiaries, but failing to meet the deadline is permanent! Individuals who are eligible who will most likely want to file and suspend include:

  • Married individuals eligible for a worker’s benefit who want to trigger eligibility for spousal or dependent benefits
  • Single individuals eligible for a worker’s benefit to establish a retroactive filing date

As this deadline is so important it may be prudent to file and suspend at a local Social Security office instead of filing online. As the last work day of April is Friday, April 29 this is effectively the deadline for filing. Those who are eligible should not put this off until the last second.

The other Social Security strategy that is being eliminated is a restricted filing for spousal benefits. The grandfather provision here is different: anyone who attained age 62 in 2015 is still eligible for this strategy. As these rules are complex I suggest that you watch our webcast that discusses these deadlines in depth.