December 3, 2015

Maximizing Social Security Benefits Just Got a Little Tougher

The recent passage of the Bipartisan Budget Act of 2015, which helped avert yet another government shutdown, has some notable implications for those hoping to maximize their Social Security benefits. It calls for the closure of several loopholes that have allowed individuals to collect larger benefits than originally intended.

The popular file-and-suspend and restricted-claim strategies, commonly used by married couples, allow for a spouse, upon reaching full retirement age (FRA), to file for benefits and then immediately suspend them. The act of filing allows the individual’s benefit to accrue delayed benefits (8% per year) up until age 70. Once the spouse reaches FRA, they would then file a restricted application to receive a spousal benefit only (based on their spouse’s earnings) and may receive as much as half of their spouse’s benefit. The spouse that files the restricted application delays their own benefit to accrue continuing delayed retirement credits, and can switch to their higher benefit at a later time.

Couples currently using this strategy will be grandfathered in; however, the file-and-suspend method will end when the budget bill becomes law on April 30, 2016, and the restricted application will be disallowed for anyone attaining age 62 after 2015.

Claiming strategies still exist that can help you maximize your Social Security benefits. For example, in many cases, delaying filing until age 70 for the spouse with a higher benefit makes sense, as they will receive an 8% annual increase for every year retirement benefits are delayed beyond their FRA. The increased amount provides a higher base for any future cost-of-living increases and will increase the survivor benefit the spouse would receive if the claimant dies first.

If you’re nearing retirement age, consult with your advisor or tax professional to determine the best strategy for your personal situation. And if you haven’t set up an online account to track your earnings and receive a Social Security estimate, go to to set up an account.

Click on the links below for additional information about the Bipartisan Budget Act of 2015 changes.