LAST CALL FOR FILE AND SUSPEND

RETIREMENT – ANDY LANDISNow that your taxes are down, time is running out for Social Security’s traditional “file and suspend” strategy. The Bipartisan Budget Act of 2015 (BBA 2015) changed two key Social Security filing strategies, “file and suspend” and “spousal-only filing.”  The deadline for “file and suspend”—at least under the old rules—is April 29.

Background – You can suspend your own retirement payments (not spousal or widow’s payments) any month from 66-70. If you are between those ages, and request (or have already requested) suspension on or before April 29, 2016, you fall under the “old rules,” in effect before BBA 2015, and you get triple rewards:

  • While you suspend payments, your future payments increase by 8% per year.
  • Your spouse and children can receive Social Security on your suspended record.
  • You can “unsuspend” retroactively, collecting some or all of your suspended payments in a lump sum.

New rules – If you miss the deadline, and request suspension on or after April 30, 2016, you are subject to the “new rules” under BBA 2015.  Then:

  • While you suspend payments, your future payments increase by 8% per year.
  • Spouse and child payments on your work record stop.  Exception: ex-spouse benefits continue.
  • Your payments and family payments re-start at age 70, or anytime you request them, but with no retroactivity.

You get only the first reward.  The other two are eliminated for anyone missing the deadline.  (We’ll examine valuable uses for “new rules” suspension in a future post.) Again, you must be 66 and request suspension before April 30 to get the better “old rules.”

How to suspend – If you’re 66 and getting Social Security, you can request suspension in-office, or by calling (800) SSA-1213.

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