file and suspend - how-to and other Q's

[Laurie]

1. So to preserve this feature for someone over 66, how exactly do you do this -what are the rules? Would you go online and register to start ss, and then the next second, suspend online? Or wait for a few days, or what? Just looking for specific how-to advice. Thanks!

Then some other Q's:

2. Say there is a 3-year difference in age, and the younger spouse was born before 1954. Both had decided to wait til age 70 to receive full benefits but may want to take advantage of this little window. Would the younger spouse be able to draw spousal benefits between their ages 66 and 70, even after the older one started drawing full benefits, right up until the younger one turns 70?

3. What if the younger spouse's full benefits are more than half of the older spouse's full amount? Are they eligible for spousal benefits at their age 66 within this closing window? Not clear on whether the younger spouse's age-70 amount would be reduced or continue to grow

4. How long would they have to have been married for?

I've looked online for these answers and couldn't figure this out. I guess I can call a ss office but some TUGgers will probably know. TIA!

 

[Conan]

1. So to preserve this feature for someone over 66, how exactly do you do this -what are the rules? Would you go online and register to start ss, and then the next second, suspend online? Or wait for a few days, or what? Just looking for specific how-to advice. Thanks!
With the latest law change, it looks like file and suspend is a thing of the past, except for people who are old enough to be grandfathered in.

For someone who is old enough to get by under prior law, they visit the social security office two-to-four months or so in advance of the date they want it to take effect and just ask for it it. The people there are generally knowledgeable and that's that.


2. Say there is a 3-year difference in age, and the younger spouse was born before 1954. Both had decided to wait til age 70 to receive full benefits but may want to take advantage of this little window. Would the younger spouse be able to draw spousal benefits between their ages 66 and 70, even after the older one started drawing full benefits, right up until the younger one turns 70?
Here's the new law:

subtitle C—Protecting Social Security Benefits

SEC. 831. Closure of unintended loopholes.

(a) Presumed filing of application by individuals eligible for old-Age insurance benefits and for wife’s or husband’s insurance benefits.—

(1) IN GENERAL.—Section 202(r) of the Social Security Act (42 U.S.C. 402(r)) is amended by striking paragraphs (1) and (2) and inserting the following:

“(1) If an individual is eligible for a wife’s or husband’s insurance benefit (except in the case of eligibility pursuant to clause (ii) of subsection (b)(1)(B) or subsection (c)(1)(B), as appropriate), in any month for which the individual is entitled to an old-age insurance benefit, such individual shall be deemed to have filed an application for wife’s or husband’s insurance benefits for such month.

“(2) If an individual is eligible (but for section 202(k)(4)) for an old-age insurance benefit in any month for which the individual is entitled to a wife’s or husband’s insurance benefit (except in the case of entitlement pursuant to clause (ii) of subsection (b)(1)(B) or subsection (c)(1)(B), as appropriate), such individual shall be deemed to have filed an application for old-age insurance benefits—

“(A) for such month, or

“(B) if such individual is also entitled to a disability insurance benefit for such month, in the first subsequent month for which such individual is not entitled to a disability insurance benefit.”.

(2) CONFORMING AMENDMENT.—Section 202 of the Social Security Act (42 U.S.C. 402) is amended—

(A) in subsection (b)(1), by striking subparagraph (B) and inserting the following:

“(B) (i) has attained age 62, or

“(ii) in the case of a wife, has in her care (individually or jointly with such individual) at the time of filing such application a child entitled to a child’s insurance benefit on the basis of the wages and self-employment income of such individual,”; and

(B) in subsection (c)(1), by striking subparagraph (B) and inserting the following:

“(B) (i) has attained age 62, or

“(ii) in the case of a husband, has in his care (individually or jointly with such individual) at the time of filing such application a child entitled to a child’s insurance benefit on the basis of the wages and self-employment income of such individual,”.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply with respect to individuals who attain age 62 in any calendar year after 2015.

(b) Voluntary suspension of benefits.—

(1) IN GENERAL.—Section 202 of the Social Security Act (42 U.S.C. 402) is amended by adding at the end the following:

“(z) Voluntary suspension.— (1) (A) Except as otherwise provided in this subsection, any individual who has attained retirement age (as defined in section 216(l)) and is entitled to old-age insurance benefits may request that payment of such benefits be suspended—

“(i) beginning with the month following the month in which such request is received by the Commissioner, and

“(ii) ending with the earlier of the month following the month in which a request by the individual for a resumption of such benefits is so received or the month following the month in which the individual attains the age of 70.

“(2) An individual may not suspend such benefits under this subsection, and any suspension of such benefits under this subsection shall end, effective with respect to any month in which the individual becomes subject to—

“(A) mandatory suspension of such benefits under section 202(x);

“(B) termination of such benefits under section 202;

“(C) a penalty under section 1129A imposing nonpayment of such benefits; or

“(D) any other withholding, in whole or in part, of such benefits under any other provision of law that authorizes recovery of a debt by withholding such benefits.

“(3) In the case of an individual who requests that such benefits be suspended under this subsection, for any month during the period in which the suspension is in effect—

“(A) no retroactive benefits (as defined in subsection (j)(4)(B)(iii)) shall be payable to such individual;

“(B) no monthly benefit shall be payable to any other individual on the basis of such individual’s wages and self-employment income; and

“(C) no monthly benefit shall be payable to such individual on the basis of another individual’s wages and self-employment income.”.

(2) CONFORMING AMENDMENT.—Section 202(w)(2)(B)(ii) of the Social Security Act (42 U.S.C. 402(w)(2)(B)(ii)) is amended by inserting “under section 202(z)” after “request”.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply with respect to requests for benefit suspension submitted beginning at least 180 days after the date of the enactment of this Act.

https://www.congress.gov/bill/114th-...1FAE1A826CFB21

The way I read it, despite the older spouse being grandfathered and thereby eligible to file and suspend, the younger spouse is too young to be grandfathered, so the price she pays for starting to collect the 50% spousal benefit that she becomes entitled to when he files (or files and suspends) is she's at that point "deemed to have filed" for her own benefits. So whenever he files (or files and suspends) she'll start getting the greater of the benefit she qualifies for on her own record based on her age at the time he filed or 50% of the benefit he qualified for at the time he filed. Meaning that's as much as she'll ever get (during his lifetime) because being deemed to have filed then, she can't try to file a second time at age 70.

3. What if the younger spouse's full benefits are more than half of the older spouse's full amount? Are they eligible for spousal benefits at their age 66 within this closing window? Not clear on whether the younger spouse's age-70 amount would be reduced or continue to grow
So the older spouse will start collecting at the age he chooses for himself, meaning if he files and suspends at age 66 or does nothing at age 66, as long as he hasn't 'unsuspended' his benefit any sooner, his benefit will begin at age 70. Meanwhile as to the younger spouse, to whom the new law does apply, if at any point he files (or files and suspends), she's deemed to have filed at that point, and will commence receiving the greater of her own benefit or 50% of what he could have had. Thus their best bet if the couple can afford it is each of them simply does nothing (apart from applying for Medicare and paying Medicare Part B and D premiums commencing at their respective age 65s) until they're approaching their respective age 70s.

4. How long would they have to have been married for?
I didn't find the answer on the social security website, but here's a secondary source saying they need to be married for a full year.
http://www.pbs.org/newshour/making-...newlyweds-need-to-know-about-social-security/

Edited to add: Because your benefit based on your earnings record is more than 50% of your husband's benefit, if your husband files (or files and suspends) on his record at any time earlier than the year you attain age 70, that puts you in the "deemed to have filed" category because it triggers the spousal benefit to you (despite the spousal benefit being of no value to you). So since he can't put off filing beyond age 70, and if I'm reading the new law correctly, you'll start getting your own benefit at age 67 (because you happen to be three years younger) even though you would have preferred to wait until you reach age 70.

 

[silentg]

I will be 62 early next year, my husband is still working age 63. Will I still be able to start collecting my SS ? I am retired, he will not until age 66. Which gives me 4 years to collect my own. I am planning a trip to SS office, don't want to go in red faced and unaware of what the option is for me. Thanks!
Silentg

 

[vacationhopeful]

I will be 62 early next year, my husband is still working age 63. Will I still be able to start collecting my SS ? I am retired, he will not until age 66. Which gives me 4 years to collect my own. I am planning a trip to SS office, don't want to go in red faced and unaware of what the option is for me. Thanks!
Silentg

Reading the above section 3 from Conan's post YOU must be 62 years old in 2015 ... THIS YEAR. Social Security will have you collect on YOUR record or HIS record (your spouse amount) ... whichever is MORE.

Sorry ... but in my layman's read of other posts ... you are barred from doing the collect on yours or his at age 62 and get MORE later by switching.

But this is my personal interpretation of a complex issue ... by ALL means, go in and talk to a real expert at Social Security.

 

[Passepartout]

I will be 62 early next year, my husband is still working age 63. Will I still be able to start collecting my SS ? I am retired, he will not until age 66. Which gives me 4 years to collect my own. I am planning a trip to SS office, don't want to go in red faced and unaware of what the option is for me. Thanks!
Silentg

You will be able to start collecting your own reduced benefit at 62.

All this 'file and suspend' stuff only affects a tiny fraction of people, and you are not among them.

Jim

 

[silentg]

You will be able to start collecting your own reduced benefit at 62.

All this 'file and suspend' stuff only affects a tiny fraction of people, and you are not among them.

Jim

Thanks, my best bet is to go in the SS office and find out. Will let you know so others who may be like me can navigate the waters too!
Silentg

 

[Conan]

I will be 62 early next year, my husband is still working age 63. Will I still be able to start collecting my SS ?

I am retired, he will not until age 66. [Does this give] me 4 years to collect my own?

You can file and begin receiving whatever you've earned based on your own 35-year earnings record, starting as early as age 62 or as late as age 70. Every year you wait adds 8% to your benefit.

The new law says:

(1) If an individual is eligible for a wife’s or husband’s insurance benefit (except in the case of eligibility pursuant to clause (ii) of subsection (b)(1)(B) or subsection (c)(1)(B), as appropriate), in any month for which the individual is entitled to an old-age insurance benefit, such individual shall be deemed to have filed an application for wife’s or husband’s insurance benefits for such month.

(2) If an individual is eligible (but for section 202(k)(4)) for an old-age insurance benefit in any month for which the individual is entitled to a wife’s or husband’s insurance benefit (except in the case of entitlement pursuant to clause (ii) of subsection (b)(1)(B) or subsection (c)(1)(B), as appropriate), such individual shall be deemed to have filed an application for old-age insurance benefits....

People turning 62 "early next year" i.e. within 180 days of the new law, are not affected by the provision quoted above. But in your case the "loophole" that the new law fixes doesn't enter into the picture. You can claim your own benefit at age 62, but it will cost you the 8% per year increase that you would get by waiting longer, and it will permanently reduce the spousal benefit that you can look forward to getting (in place of your own benefit) when your husband starts collecting.

What I wrote originally in answer to this question: if you start taking your own benefit at age 62, that's what you'll receive until your husband files for his own benefit when he reaches age 66. At that point you might get an increase: the social security people will compare what you were getting from your age 62 filing versus a reduced portion of 50% of his age 66 filing, and from then on you will get the larger of the two.

I thought the answer is the same for people who fall under the new law, but I'm having second thoughts: Once the new law takes effect, I believe there's an additional downside (besides the reduction in spousal benefit) to the wife's filing at age 62. Doesn't that entitle the husband to a spousal benefit (even though the spousal benefit is of no value to him)? Therefore isn't the husband immediately "deemed to have filed" under the new law quoted above? So as soon as the wife files at age 62, he is forced to start getting his own benefit at 63. Therefore she'll get the greater of her age 62 benefit or a reduced portion of 50% of his age 63 benefit.
And because he's still working, he also falls under the earnings test https://www.ssa.gov/oact/cola/rtea.html meaning if he earns more than about $15,000 neither wife nor husband will collect their full age 62/63 benefits!

 

[Passepartout]

Thanks, my best bet is to go in the SS office and find out. Will let you know so others who may be like me can navigate the waters too!
Silentg

[Hint] If you are going to do that, MAKE AN APPOINTMENT. Just walking in and waiting to see an agent is setting yourself up for a lengthy wait. Actually, for most people who don't have complex issues, simply applying online at www.ssa.gov is the fastest, easiest way to initiate collecting your SS retirement benefits.

Jim

 

[Conan]

Thanks, my best bet is to go in the SS office and find out. Will let you know so others who may be like me can navigate the waters too!
Silentg

Unless you're turning 62 in the next few months, I'd wait at least until January before going down there, so as to give the social security folks time to get properly trained on the new law.

 

[MULTIZ321]

Social Security Rule Changes May Affect Retirement Strategy - by Liz Weston/ Business/ Money Talk/ Los Angeles Times/ latimes.com

"Dear readers: Congress just killed the Social Security strategy known as "claim now, claim more later" that allowed married couples to boost their benefits by tens of thousands of dollars.

The changes, which were part of the budget deal signed into law last week, also eliminated the option of getting a lump-sum payout if you suspended an application for benefits and later changed your mind. Today's column will focus on those changes..."

Changes to Social Security have eliminated the option of getting a lump-sum payout if you suspended an application for benefits and later changed your mind. (William Thomas Cain / Getty Images)


Richard

 

[stmartinfan]

Do not count on the "experts" at Social Security to give you good or accurate advice They can be ill informed and have no responsibility to advise you of options that might be a better choice for you. A relative got completely inaccurate advice about her filing options recently.

It's in your best interest to research as much as you can on your own. There are several SS calculators out there, and I was just reading that several of them have been scrambling to get updated to reflect the changes that were just made in the file and suspend regs.

I found good info in the book, "Get What's Yours," although it reflects the file and suspend options before the recent change. It does still have a lot of good info that's relevent, and understanding how file and suspend used to work makes it easier to understand the change. The book does a good job of covering "deeming"-- the issue around getting locked into your spousal benefit and not being able to change to your own benefit.