Social Security Changes: Is Your Local Rep Giving You Bad Advice?

social security couple

Better have a degree in rocket science to figure out the new Social Security rules

We recently told you about the Social Security changes that will soon do away with popular – and lucrative – claiming strategies like “file and suspend.”

(Want more details? See the wrap-up at the end of this article).

These strategies permit spouses to maximize their joint benefits, and can add thousands of dollars to the family nest egg.

SSA reps not familiar with new rules

Well, watch out! Congress passed the rule changes toward the end of 2015, then left it up to other government agencies to flesh out the detailed new rules and procedures.

The problem? Some of the representatives staffing local Social Security offices don’t seem to understand the rules, and may be offering incorrect information to retirees trying to lock in benefit options before it’s too late.

Bad advice at the SSA office?

One client already contacted us about her bad experience visiting her local Social Security office up north. She went in person to “file and suspend” benefits before the new April 29 deadline, and was (erroneously) told by the SSA that it wouldn’t do her any good. They claimed that her husband, even though he’s over age 62, would not be able to claim a spousal benefit unless he did so within 6 months of her filing.

That advice is incorrect, and unfortunately does not seem to be an isolated case of misinformed SSA representatives. Mary Beth Franklin, a financial journalist who specializes in Social Security issues, wrote an article for Investment News citing similar horror stories of misdirected SSA reps.

The work-around

Franklin suggests that those eligible to file and suspend before April 29 do so by skipping the SSA office altogether and filing online.  Here’s her advice: You should state that you want your benefits to start at 66 (or as soon as possible if older than full retirement age). In the remarks box at the end of the application write: “I want to suspend my benefits.” Someone from SSA will contact you within a few days to verify the information before processing the application.

Rachael Grattan

Rachael Grattan, Associate Financial Advisor, is our in-house specialist on Social Security issues.

Summary of Recent Social Security Changes

Anyone who is 66 or older and submits a request to file and suspend their retirement benefits by April 29, 2016, will be able to trigger spousal benefits while the worker’s own benefits stay on “hold” and continue to grow up until age 70. For those that file after April 29, one spouse would actually have to collect his or her retirement benefits in order for the other spouse to be able to collect a spousal benefit.

If you are 62 or older as of January 1, 2016, you can still benefit from the current strategy to take spousal benefits at your full retirement age (usually age 66), and then switch to worker’s benefits at a later date. This allows your own worker’s benefit to keep growing until age 70, and maximizes your total lifetime benefits. You can only do this if your spouse is either already claiming benefits, or has “filed and suspended” prior to April 29, 2016.



About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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