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There Goes My retirement Plan!

WinniWoman

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What plan might work best for you is to take the spouse benefit at FRA, 66-67, and later at age 70 you could apply for your own benefit that would be a lot higher than getting it at FRA. So if you have longevity in your family and expect to live past 90 years old, you would collect more by waiting.


I started this thread because the Congress just eliminated this option in the new budget so bye bye to that. I am pissed.:annoyed:
 

WinniWoman

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If both spouses worked and paid in to SS, both spouses get their own retirement benefits. This thread has been more than a little misleading. IF there is a large discrepancy between the spouse's contributions- and consequently- benefits, the lower earning spouse can choose to take half the higher earning spouse's benefit- or their own. Whichever is greater.

So, there is no reason to be annoyed. Your benefit is your own, based on what you and your employers contribute during your working years.

Jim

EXACTLY RIGHT! As with everything else run by the government,the SS system can be very confusing. If you and your husband will have similar benefits, and you have enough savings and so forth, then keep it simple and just collect yours when you want and he collects his when he wants. End of story.
 

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I just noticed that if you were born before 1954 you can still use this option.

The new restricted application rules apply to those who reach age 62 after 2015, he said, which means people born before 1954 can still pursue this strategy. The limitations on the file-and-suspend approach go into effect six months after the budget’s effective date.
 

Conan

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If both spouses worked and paid in to SS, both spouses get their own retirement benefits. This thread has been more than a little misleading. IF there is a large discrepancy between the spouse's contributions- and consequently- benefits, the lower earning spouse can choose to take half the higher earning spouse's benefit- or their own. Whichever is greater.

So, there is no reason to be annoyed. Your benefit is your own, based on what you and your employers contribute during your working years.

Jim

Let's agree to disagree. Unless in the course of 35 years the second spouse earned more than slightly under half of what the higher earner made, she gets no greater benefit than had she never worked.
 
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DebBrown

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Let's agree to disagree. Unless in the course of 35 years the second spouse earned more than about 2/3's of what the higher earner made, she gets no greater benefit than had she never worked.

Thanks, everyone. DH and my projected SS benefits are almost the same so I'm glad to get this cleared up. :)

Deb
 

VacationForever

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Let's agree to disagree. Unless in the course of 35 years the second spouse earned more than about 2/3's of what the higher earner made, she gets no greater benefit than had she never worked.

The number is probably closer to slightly under half than 2/3rd due to the scale used to calculate PIA (Primary Insurance Amount).
 

Conan

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The number is probably closer to slightly under half than 2/3rd due to the scale used to calculate PIA (Primary Insurance Amount).

My mistake - - I had it backwards. If the higher earner is at the top it could be near as little as 1/3rd (not 2/3 as I had it). But a better formulation for most people is "slightly under half"

I'll go back and edit my post.
 
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WinniWoman

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Let's agree to disagree. Unless in the course of 35 years the second spouse earned more than slightly under half of what the higher earner made, she gets no greater benefit than had she never worked.

Correct- that is true also
 

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I started this thread because the Congress just eliminated this option in the new budget so bye bye to that. I am pissed.:annoyed:

The way I read the regulation is they eliminated file and suspend. If husband and wife are the same age, one person can file for benefits at full retirement age and the other collects spouse benefits. The spouse that suspended benefits files again at age 70 to collect the higher amount. At age 70, the person collecting spouse benefits can start their own benefit at a higher amount. This might not work for everyone because the spouse benefit might be higher than their own benefit at age 70. If a married couple are a few years apart and the lower wage earner is older, it just doesn't work. Also, both people in a marriage must have a desire to collect a higher benefit at 70 and willing to wait.

File and suspend means one person files at full retirement age so the spouse can collect spouse benefits. Then, the person that filed for full benefits suspends those benefits and waits until age 70 to start taking benefits at the higher amount. This works for very few people because most want the income prior to age 70. If I remember correctly, someone else posted less than .01 percent file and suspend, or 1 out of 10,000. So it is a regulation the government can due away with and not receive much backlash.
 
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tompalm

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Looking at it again, it says the bill extends to what you are talking about. But, I think it is still possible if your spouse benefit is more than your full retirement benefit at age 66. Possibly take the spouse benefit and at age 70 collect the higher. Very few people can do that because their own benefit will be higher than the spouse benefit. Maybe I am reading it wrong and once you file, there is no collecting a higher amount later. That has more to it than file and suspend and is a big change. Each person really needs to ask an expert about this. We did an interview with a Schwab Rep a couple months ago and figured out which plan works best for us. They have someone that will call you and collect your information to inform you what works best. The spouse benefit just didn't work for us and was not an issue. But I did change my mind about collecting at 62 and decided to wait until 66 years old after the interview.

Are there any experts on this forum that can clear this up. This is a much bigger change than I thought it was. Sounds like once you file for spouse benefits, it is over because you are required to take your own benefit if it is higher. But in a very few cases someone's own benefit at age 66 might be lower than the spouse benefit and later at age 70 their own benefit is higher. Not sure they can file again if already collecting.
 
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VacationForever

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It brings to mind whether a person can simply file and not suspend, and spouse draws at FRA, to then switch to self's benefit at 70.
 

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... If I remember correctly, someone else posted less than .01 percent file and suspend, or 1 out of 10,000. So it is a regulation the government can due away with and not receive much backlash.

Yes, that and most people using this were higher income earners, so perhaps part of discreet strategy to preserve SS.
 

Conan

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Here's the actual text:

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(n);

“(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...14/text#toc-H42AB7F5BEC284309AB1FAE1A826CFB21
It looks to me like "deemed to have filed" in (a) means that as soon as you're eligible to get a spousal benefit, your own benefit is triggered (so no second bite at the apple for you at age 70). And under (c), if you do file and suspend, your spouse gets no spousal benefit payment until your payments resume.
 
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wilma

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Agree that this was a predicted change to close loopholes. When we went a financial planner a few years back he told us about some of these SS loopholes including the one where you could start getting benefits at 62, refile at 66 or 70 & pay back what you have received and start collecting your higher benefit. He warned though that these were unintended SS benefits that savvy financial planners had discovered and would likely be taken away at some point to shore up SS for the longterm. We need to be flexible and have a diverse stream of retirement funds, things change and we need to be prepared.
 

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Looking at it again, it says the bill extends to what you are talking about. But, I think it is still possible if your spouse benefit is more than your full retirement benefit at age 66. Possibly take the spouse benefit and at age 70 collect the higher. Very few people can do that because their own benefit will be higher than the spouse benefit. Maybe I am reading it wrong and once you file, there is no collecting a higher amount later. ...

Are there any experts on this forum that can clear this up. This is a much bigger change than I thought it was. Sounds like once you file for spouse benefits, it is over because you are required to take your own benefit if it is higher.

The issue you're talking about is "deemed filing", and yes, the change that's going in (for people who aren't yet 62) will preclude the refiling later. Specifically, what "deemed filing" means is that if you try to file for your spousal benefit, they "deem" that you're actually filing for your own benefit. If the spousal benefit is higher, then they'll make up the difference. If not, you're simply filing for your own benefit. But in either case, you're filing for your own benefit first, and they'll make up the difference if the spousal is higher.

What this means is that if you file for spousal at age 66, there's no extra benefit later. You've already claimed your age 66 benefit, so it doesn't go up at age 70.

As noted, those of us old folks over age 62 are grandfathered in. We can still file once for spousal and then later for increased benefits at age 70. I'm terribly sorry that the rest of you young folks are missing out. But I'd still trade with you -- I'll take going back to my 50's in exchange for this small benefit difference :D
 

VacationForever

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The issue you're talking about is "deemed filing", and yes, the change that's going in (for people who aren't yet 62) will preclude the refiling later. Specifically, what "deemed filing" means is that if you try to file for your spousal benefit, they "deem" that you're actually filing for your own benefit. If the spousal benefit is higher, then they'll make up the difference. If not, you're simply filing for your own benefit. But in either case, you're filing for your own benefit first, and they'll make up the difference if the spousal is higher.

What this means is that if you file for spousal at age 66, there's no extra benefit later. You've already claimed your age 66 benefit, so it doesn't go up at age 70.

As noted, those of us old folks over age 62 are grandfathered in. We can still file once for spousal and then later for increased benefits at age 70. I'm terribly sorry that the rest of you young folks are missing out. But I'd still trade with you -- I'll take going back to my 50's in exchange for this small benefit difference :D

Filing or deemed filing was never in our plan so it does not affect my husband and I. Our plan is still the same, he claims at 70 and I claim on my own account at 62. My 62 benefit is already greater than half of his at my FRA so we would not have benefited from that loophole.
 

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Filing or deemed filing was never in our plan so it does not affect my husband and I. Our plan is still the same, he claims at 70 and I claim on my own account at 62. My 62 benefit is already greater than half of his at my FRA so we would not have benefited from that loophole.


Thats our plan too, my wife will file next year. The other factor is that when either dies the surviving spouse receives whichever is higher so it makes sense to maximize the higher earner by claiming at 70.


Sent from my iPad Mini 4 using Tapatalk
 

VacationForever

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Thats our plan too, my wife will file next year. The other factor is that when either dies the surviving spouse receives whichever is higher so it makes sense to maximize the higher earner by claiming at 70.


Sent from my iPad Mini 4 using Tapatalk

In my case my husband is quite a bit older so it is a no-brainer. He would have to live beyond 100 for me not to file at 62 for the breakeven.
 

WinniWoman

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My husband's SS will only be slightly higher than mine. I want to retire badly, but I figured if I could just hold out somehow until age 65 to get Medicare, he would already be retired - he's 2 years older than me(but he would have filed and suspended at age 66 (his FRA)) and I would not take SS until age 67 (my FRA) and claim spousal benefits at that time, not mine. That plus our savings would get us to age 70, when we would each take our own max SS benefits.

Can't do it now.

I guess maybe now the plan might be to just take my SS at FRA 67 plus use our savings and have my husband just wait until age 70. I don't know....or maybe both just tale it at full retirement age and the heck with everything...

Will see what goes on in a few years in our lives and decide then...hopefully will have a reputable financial planner by then.
 
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How a person find out how much he / she will get a a certain age . Also, how to calculate how much money to get if apply for spouse retirement benefit
 

VacationForever

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How a person find out how much he / she will get a a certain age . Also, how to calculate how much money to get if apply for spouse retirement benefit

There is a calculator you can use on th ss website. You can also make an appointment with a local ss office to run numbers. The issue with the local ss office is that their calculator presumes that you stop working immediately. You should get a pretty good idea between the 2.
 

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Blues

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There is a calculator you can use on th ss website. You can also make an appointment with a local ss office to run numbers. The issue with the local ss office is that their calculator presumes that you stop working immediately. You should get a pretty good idea between the 2.

That works. Even better is to create an online Social Security account at www.ssa.gov. There's a bit of security hassle when you set it up, to verify your identity. But then you can create a personal Social Security statement any time you'd like, as often as you'd like. It shows, among other things, your projected benefit at age 62, at FRA, and at age 70. Plus projected survivor benefits, minor child benefits, etc. Plus your full earnings record, which is important to review every couple of years to make sure your earnings were reported correctly (I had a missing year in mine once; it took quite a while to get it corrected).
 
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