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Social Security: File and Suspend is Ending, but Not For Everyone

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    The common Social Security filing practice known as 'file and suspend' is ending this year, but not for everyone.

    File and suspend is the strategy where one spouse files for their Social Security benefit and then immediately suspends receiving the benefit. It is done to establish a base for the worker’s dependent or dependents to begin receiving benefits attributed to the original filers work record. This practice has helped seniors maximize benefits, but it has also created a financial strain on the two Social Security trust funds.In order to help alleviate the stress this practice has caused on the trust funds, the a provision of the Bipartisan Budget Act of 2015 eliminated this practice, but there is a caveat.

    If you are at least 66 or will turn 66 by April 30, 2016, then you can still obtain your benefits under the previous file-and-suspend system. So if you fall into this category then make sure you contact the Social Security Administration before April 30 to make sure you are able to maximize your benefits before this it's too late.

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    Seniors who can still take advantage of file and suspend better do so before it's too late.

    I'm still many years away from claiming my SS benefits, but I understand why this rule change is happening. It seems to be more of an oversight than something the government intended for seniors to take advantage of.

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    I'm too young to take advantage of file and suspend as well. But there is something I can't seem to get an answer, perhaps someone can help on this forum. My wife was 62 this past year and has stopped working and we are trying to decide if she should apply and start benefits based on her earnings. Then when I retire several years from now she would be eligible for my spouse benefit and get bumped up to 50% of my PIA. Obviously, if she commences her benefit early there would be a reduction, let say 25% for sake of argument. But when I retire, she will be past 66 so the question is this, will the spouse supplement also be subject to an early retirement reduction even though that portion (spouse supplement) was not received early? The Q&A's on SSA.gov seem to say that.

    Example:

    Her PIA = $1000, Benefit at 62 = 75% times $1000 = $750

    My PIA = $3000, Spouse benefit = 50% times $3000 = $1500, Spouse supplement = $1500 - $1000 = $500

    When I retire she will be over 66. So will her spouse benefit when I retire be $1250 ($750 + $500) or will the $500 also be reduced because she commenced her benefit based on her earnings early?

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    I called the SSA help line. They told me the $500 was reduced even though it didn't start until my wife was well past her full retirement age when the spouse benefit started. The early reduction factor applied would be based on her age 62 original commencement, i.e., 70%. This seems really unfair to early discount a benefit she couldn't get until I filed.
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    Have question, hoping you can help. I will be 65 this year. My husband is 66 and stated collecting his SS benefits. We both have worked and eligible for Ss benefits Can I take reduced benefits based on my earnings now, and then , when 66, claim spousal bneifits and get half of what he gets and elimitate mine?
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    Sharonseneca Wrote: Have question, hoping you can help. I will be 65 this year. My husband is 66 and stated collecting his SS benefits. We both have worked and eligible for Ss benefits Can I take reduced benefits based on my earnings now, and then , when 66, claim spousal bneifits and get half of what he gets and elimitate mine?

    I would contact the Social Security Administration and talk to someone who explain your benefits and options in detail.

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    I was reading today that there's been a lot of confusion among seniors and even the staff at the Social Security Administration about how this is being implemented.

    Has anyone had an issue while trying to get this figured out with the SSA?

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    JaredS Wrote:

    I was reading today that there's been a lot of confusion among seniors and even the staff at the Social Security Administration about how this is being implemented.

    Has anyone had an issue while trying to get this figured out with the SSA?

    I've been reading the same thing. There's only one month to go before this rule change, so I sure hope all parties are able to figure everything out before it's supposed to be implemented.
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    There might be some answers in this article for everyone here. It is about to end; you have until April 29th so this article says. So something I would seriously look into before the window closes, for most. If you are a widow, if won't effect your situation.

    This lucrative Social Security strategy is about to go away

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    Perhaps a better article actually --->>

    How to File and Suspend Social Security Benefits Online Before 4/29 Deadline

    Explains what it is, who exactly qualifies, and how to apply online before deadline. Pretty comprehensive. Hope that helps.