On Monday, President Obama signed the Bipartisan Budget Act of 2015. With this Act comes significant changes to Social Security claiming options, although the core benefits of Social Security have not changed.
While many of us in the financial planning world have assumed changes to the various claiming strategies were on the horizon, few if any of us anticipated it happening so quickly without really any discussion or debate. Most of us were not aware that it was attached to the budget bill until the House version was passed and released last week. I was very concerned with the minimal grandfathering and some other missing pieces in the House version.
Luckily, adjustments were made in the Senate version to account for certain issues that could have been damaging for widows and for folks already receiving benefits based on the existing file and suspend rules.That said, I’m still surprised by the short grandfathering provisions provided.
For those of you currently nearing the age of 62 and 66, please be aware of these changes and understand the state of your Social Security benefits because action may be necessary in the near term.
To better understand how this may impact you, I highly recommend the following two links:
Navigating The Effective Date Deadlines For The New File-And-Suspend And Restricted Application Rules by Michael Kitces — Make sure to check the chart Michael includes midway through his post to understand how you are impacted based on your birthdate.
Final Budget Dramatically Changes Social Security Claiming Options by Social Security Timing — This post includes a useful video as well as reference links.
If you have any questions on this or would like to discuss how this may impact you, please contact me. You can use the contact page or call our office at 800-716-0674.