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It would appear that a spouse who claims on their own benefit at 62 or 66 who then has a spouse file for spousal at their FRA on that benefit while waiting until 70 to claim their own benefit would not be effected.
Just read the article and while Mr. Kotlinkoff is correct on balance he ignores several key facts. Chief among them is that the Kennedy majority decision effectively changed the idea of "marriage" in the United States with the nationwide legalization of gay marriage.
Thus:
"I’m also concerned about how this bill would affect income sharing and power plays in marriages. Take the case of a wife who earned very little, because she stayed home to raise children. Assume her husband is the same age. If her working husband refuses to take his retirement benefit before age 70 — because he doesn’t want to receive permanently lower benefits — the wife will have to wait until age 70 to collect her spousal benefit. That means she’ll receive no income in her own name from Social Security until she reaches age 70. Indeed, if this bill is passed, the people that are going to see their Social Security checks disappear in six months are primarily women. "
While certainly is a concern "spouse" can no longer automatically mean a female in such situations. It also begs the larger question of how deep the federal government is to go into the dynamics of a marriage. Any spouse that requires intervention by the state to keep their partner in line fiscally has more problems than government can solve I shouldn't wonder.
Q: My wife and I are trying to decide when to take our Social Security benefits and we keep hearing about a strategy called "file and suspend." What is it and could it help us increase the amount of money we get?
A: Yes, it could, depending on your circumstances. File and suspend is a strategy that can raise benefits for qualifying couples through the use of a combination of spousal benefits and what Social Security calls delayed retirement credits. At least one member of the couple must have reached full retirement age, currently 66 for people born between 1943 and 1954.
The file and suspend rule was added to Social Security in 2000 as part of the Senior Citizens Freedom to Work Act to help couples plan their retirements. But it did not attract much public attention until a few years ago, when academics and financial planners began to write a flurry of articles about this and other new benefit-enhancing strategies.
File and suspend was an intended outcome of the law. It was for the affluent who had accountants/tax advisors who knew the law. It was when it mainstream and not a source of advisor profit that it became taboo. I have been following it for over ten years plus.
That will certainly change where the break even point is for many married couples on delaying. I certainly would not go past FRA to file and collect if Suspend is not available, since I know I will not be penalized if I work past FRA, if I want to. Of all the things to cut, that is certainly one of the least painful, IMHO.
His point about what a few years make in birthdate is rather childish. Everyone that was late 60s by 2000 never had that option, as they would have already decided to file. So those that turned 65 in 2000 and to date, have been the only beneficiaries.
wives with no work record will be hit hard as well as those divorced .
Personally I suspect this was a screwup. It was written in secret without public and probably SS expert input. My hunch is that what they wanted to target they didn't. As we know file and suspend is often misused and misapplied.
Budget bill has drastic changes to spousal benefits and those who suspended retirement
See this link from Laurence Kotlikoff, the author responsible for most of the strategies that some have followed or intend to follow regarding filing on a spouse, suspending, etc.
See this link from Laurence Kotlikoff, the author responsible for most of the strategies that some have followed or intend to follow regarding filing on a spouse, suspending, etc.
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Budget bill has drastic changes to spousal benefits and those who suspended retirement
