• Stephanie O. Joy, Esq. / Joy Disability

The Rewards of Social Security Retirement Just Went Down...

[When insomnia hits, time to make productive use of it to get out this post regarding these very significant changes to retirement benefits, which will effect millions of people in a substantial way.]


What is the nuts and bolts of what President Obama has just signed off on, the changes with regard to Social Security Retirement?


1) By end of April, 2016, people will not be able to file for benefits and suspend the collection of their benefits, without also suspending any benefits received by their dependents (spouse, children, aged parents, etc.) Previously, this claiming strategy has permitted one member of a married couple to file for Social Security, thereby enabling a spouse to file for a spousal benefit. (Or other dependents to file on that worker's record, such as minor children. The member spouse, meanwhile, could then suspend his or her own retirement benefit after filing, so that his benefit untaken, could continue to earn those "delayed retirement credits" (DRCs), causing his own benefit to grow by 8% a year to age 70 (a 32% increase over his standard primary insurance amount (PIA)).

2) Also, for those that do not turn 62 before the end of 2015 (yes, less than 2 months from now), the changes also will prevent the ability to file what’s called a restricted application for spousal benefits, and collect only a spousal benefit while letting their own retirement benefits rise by 8% a year for up to four years, until age 70. Instead, filing for spousal benefits will be deemed by Social Security to also trigger a person’s own retirement benefit, which, previously occurred only if he filed for spousal benefit before his FRA (full retirement age).

NOTE: "Instead of holding a public debate, Congress tacked these changes onto an emergency bill to avoid a U.S. debt default, bail out Medicare from enormous premium increases next year, and extend the life of Social Security’s disability insurance program, which had been scheduled to run out of money in less than a year. There was no public evaluation or discussion of these changes, and there are still no publicly identified authors of these reforms." http://time.com/money/4105571/new-social-security-claiming-rules/ Don't you love the transparency? I don't know if these changes are right or wrong, but I can say that for those that are 61, 60, 59,58 and others closely aging in on retirement, many have just lost at least $100,000 of their retirement budget in one fowl swoop. I would have preferred to see President Obama and Congress make the cut off date such that it did not hurt those that are so close to retirement that they clearly can not recoup in any meaningful way. If the so-called loopholes were do damaging to our overspending government budget since 2000, why did they not make these changes in a 2001 bill, to be effective 15 years later (or to grandfather those, say, 50+ or 55+). It is the poor planning that is disturbing and the lack of care when tampering with the retirement of others (obviously immaterial to those whose power made these changes.)

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