Sunday, January 31, 2016

Social Security Changes You Need To Know About Before It's Too Late

A Forbes article explains how there are provisions that phase out two Social Security claiming strategies in the Bipartisan Budget Act of 2015 (a federal statute concerning spending and the budget in the US). In the Beginning of May 2016, married couples will no longer be able to file for and then suspend receiving benefits for the purpose of making their spouses eligible to take spousal benefits. Applications to restrict the claiming of benefits to just spousal are limited to those who were at least age 62 as of January 1, 2016. The ability to use restricted filings will be completely phased out in 2023 when the last of those eligible to use restricted filings turn 70. 

The purpose of this is to decrease the amount of people that decide to claim their retirement benefits at an earlier age. This encourages people to calculate their expected lifetime income streams from claiming at various ages. If people decide to delay claiming their benefits until they reach the full retirement age, the increase is 2/3% per month for each benefits are delayed until the age of 70. Overall, a person will receive a premium on their benefits if they wait until they are at the age of 70. 
An important thing to focus on when people are determining when to claim their benefits, they should consider their expected longevity as well as risk of dying sooner or later than expected. 

The rest of the article provides a more in-depth explanation of the new claiming rule and determining when to claim. 

http://www.forbes.com/sites/investor/2016/01/31/social-security-changes-you-need-to-know-about-before-its-too-late/#7acf71cd6343

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3 comments:

  1. UnknownJanuary 31, 2016 at 8:59 PM

    The purpose of the provisions is interesting because it could certainly help solve some of the problems facing Social Security. With the Baby Boomers aging, promoting those eligible to wait to withdraw their benefits until the full retirement age would help keep the Social Security system healthy for a little while longer. It would ultimately not solve any problems in the long run, though.

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  2. AnonymousFebruary 1, 2016 at 9:26 PM

    Yeah, its just unfortunate that our generation will have to work until we die without much time for retirement. It makes sense as a way of solving this problem because of the social security funds drying up because of the size of our parents generation. Its unfortunate as a culture that we are such a work heavy culture. It would be nice that if we work really hard during our work years to be able to have at least a few years of solid retirement. Oh well though.

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  3. AnonymousFebruary 1, 2016 at 10:43 PM

    I found this article very interesting. Especially for the people that will be entering the job force and the real world very soon. I really believe that learning how to invest in one's future and how to save money/build wealth for retirement at a very early age is crucial. Social Security is not dependable in our future.

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