Strategies for Claiming Social Security Benefits

For 2016 changes in the rules about File & Suspend and filing a restricted application, scroll to the bottom.

Research Articles and Fact Sheets

Sheedy, Rachel L. 2014 “Social Security Offers Lump Sum Payouts.” Kiplinger.com. Available at http://www.kiplinger.com/article/retirement/T051-C000-S004-social-security-offers-lump-sum-payouts.html.

  • This article was written based on the rules in effect prior to November 2015 and may no longer be valid if, based on your age, you are no longer eligible to file-and-suspend.

Meyer, William and Reichenstein, William, 2012. “How the Social Security Claiming Decision Affects Portfolio Longevity.” Journal of Financial Planning 26, 2:53-60.
Click to see an abstract and find out if you have access to this article through your local library.

  • This article was written based on the rules in effect prior to November 2015 and may no longer be valid if, based on your age, you are no longer eligible to file-and-suspend or file a restricted application.

Munnell, Alicia H. and Mauricio Soto. 2005. “Why Do Women Claim Social Security Benefits So Early?” Center for Retirement Research, 35 (October). Available at: http://crr.bc.edu/briefs/why-do-women-claim-social-security-benefits-so-early.

Shuart, Amy, David Weaver, and Kevin Whitman. 2010. “Widowed Before Retirement: Social Security Benefit Claiming Strategies.” Journal of Financial Planning 23, 4: 45-53.
Click to see an abstract and find out if you have access to this article through your local library.

  • Since survivor’s benefits are not affected by the new rules, the conclusions of this research article are still relevant. 

Social Security Administration. Revised annually. Windfall Elimination Provision, SSA Publication No. 05-10045. Available at http://www.socialsecurity.gov/pubs/10045.html or 1-800-772-1213.

Social Security Administration. June 2012. Government Pension Offset, SSA Publication No. 05-10007. Available at http://www.socialsecurity.gov/pubs/10007.html or 1-800-772-1213.

Social Security Benefit Calculators
Commercial Social Security planning tools for evaluating different claiming strategies

Search online for “Social Security calculators.” Try more than one, to see if they agree on which claiming strategy will work best in your situation. One calculator that I have seen recommended frequently is http://www.maximizemysocialsecurity.com/ ($40 fee/year). Another is https://www.SocialSecuritySolutions.com/ , which costs $19.95 and up, depending on the plan you select. Both of these calculators are thorough and can handle special situations, such as a government pension for work where you did not pay into Social Security.

 

New Rules as of 2016: File & Suspend and filing a Restricted Application

The Bipartisan Budget Act of 2015 ended the File & Suspend strategy except for those who have already implemented the strategy, or who did so by April 29, 2016 – which means the person who files and suspends was born on or before April 30, 1950. File and suspend involves one spouse – usually the older or higher earner – filing for benefits but suspending and receiving no payments, in order to let those benefits increase from delayed retirement credits, but still allowing a younger or lower earning spouse to collect spousal benefits.

Filing a restricted application will still be available at Full Retirement Age ONLY for those born no later than January 1, 1954. Under this strategy, the filer can choose to receive only spousal benefits, and delay their own worker benefits, which will accrue delayed retirement credits until they are claimed later.

These changes do NOT impact widows and widowers; they may still file for one benefit (worker or survivor) and later switch to the other.

I summarize these two strategies, how they changed, and who is impacted in my post on University of Illinois Extension’s Plan Well – Retire Well blog – If you haven’t yet filed for Social Security, you may need to change your plans. Be sure to read the last section, where you’ll learn how different age groups are impacted.

To get all the details, I suggest getting a cup of coffee or hot chocolate and reading one or more of these authoritative discussions.

Changes in Social Security Claiming Rules: Update for Financial Planners, a post on The SS Choices blog,  spells out who will and will not be affected. It then goes on to explain the details for those who will be impacted. Note: This is written by a team that also sells software to compare Social Security claiming strategies

Michael Kitces, author of the Nerd’s Eye View blog has two excellent posts:

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