One of my readers, Judy, asked me the following question:
“Will the file and suspend change prevent me (62nd birthday is not until 8/26/17) from participating? Hubby still works but is already 63 and so I guess can file and suspend.”
Good question, Judy. And I’m sure that a lot of other people are looking for some guidance on this as well. So let’s tackle this one.
A bit of a recap first…
First, as a bit of a recap for everyone, the File and Suspend strategy was phased out earlier this year. I won’t rehash all the details here. Here’s a link to an article I wrote that can fill everyone in on the details. http://retirementplanningmadeeasy.com/new-changes-in-social-security-claiming-strategies/
I also wrote a little bit more here a few months later: http://retirementplanningmadeeasy.com/5-ways-social-security-changes-will-impact-your-retirement/
Congress can change Social Security rules. So it’s super important to watch what our representatives are doing going forward.
Since Social Security is a backbone of most people’s retirement plan, understanding these rules is especially important.
Here is my reply:
The File and Suspend option will go away after April 30th 2016. And even under current rules you have to wait until your full retirement age of 66 in order to do it. So you and B___ won’t be able to do this strategy.
Also, since you did not turn 62 before the end of 2015, you won’t be able to do the Restricted Application strategy either.
In y’alls case the way to increase your Social Security payments will be through delaying them. If you continue to work you’ll very likely want to wait until age 66 before drawing Social Security. If I were you, being self employed is such a joy, I’d keep working at least until age 66. Unless you have other things happening in your life or other goals you want to accomplish that work is hindering you from accomplishing.
Beyond age 66, if you choose to delay Social Security that decision should be based on your health and family history of longevity. The healthier you are, and the longer your parents lived, then the greater likelihood that you will have a long life that beats life expectancy. In that case, delaying Social Security up to age 70 will allow you to collect more from the program.
Hope that helps!
Thanks for asking this question, Judy. This is a very important issue and retirees need to know how the Social Security changes will affect them.
As of right now (August 2016), I am not aware of any other changes that are pending with Social Security. But it’s something to stay on top of in the news. And it goes without saying that when I hear of any changes I will notify all my readers on this blog.
P.S. To make sure you do your 401(k) rollover the right way, download the 401(k) Rollover 10-Point Checklist today!