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Yet those forced to collect Social Security at age 62 because they are acting as full-time caregivers for aged family members are given NO break by Congress. That, in spite of a bill that has been introduced unsuccessfully year after year that would stop the financial penalty against those people (usually women and often SINGLE women who already have low lifetime earnings). People who voluntarily do what many praise as "the right thing" by enabling the infirm elderly to remain at home instead of in care receive a lifetime punishment in terms of their future SS payments.
Folks, has anyone seen anything to suggest the following is effected:
Spouse A files for Social Security on their own benefit
Spouse B then files for Social Security on Spouses A benefits and defers taking theirs to a later date
Spouse B files for their own benefit at age 70.
There is no filing and suspension.
That is the deeming provision that the legislation will have go into effect for those reaching age 62 beginning January, 2016.
What "deeming" means in this provision, is that a person who is insured for their own SS (meaning they have their 40 quarters) is deemed to file for their own SS when they file as a spouse. So, they get their own retirement benefit first and then if their own FRA amount is less than 1/2 of their spouse's FRA amount, they get some more. It basically eliminates in 2016 those who were using a spousal strategy. Deeming used to end at FRA, now it will go to age 70.
If their own FRA amount is greater than 1/2 of their spouse's FRA amount, they are not due any spousal benefits. Of course, they are due survivors if their deceased spouses amount is greater than theirs.
So, married couple, Sally and Harry each worked and are insured.
Harry files for his own SS and it is $2200.00 a month.
But Sally's own SS at FRA is $1800.00 a month.
If she turns 62 anytime past 2015, she is deemed to file on her own (no matter her age) and get either her FRA amount, a reduced amount, if she files prior to FRA, or an enhanced amount if she does not file until 70.
She cannot receive benefits as Harry's spouse because 1/2 of Harry's is $1100.00 and her own FRA of $1800.00 is greater than 1/2 of his.
michael kitces looked at this today . if she is older then 62 restricted application is still ok
Effective Date For Elimination Of Restricted Application
Notably, though, the new rules for restricted application applies only to those who attain age 62 in any calendar year after 2015. Thus, it appears that today’s retirees who are full retirement age (or simply who are already at least age 62 in 2015) will still be able to utilize a restricted application. Only future retirees – those who turn 62 in 2016 or later, which means those who would have been planning to engage in a restricted application in 2020 or later – will lose access to the Restricted Application claiming strategy.
michael kitces did an article on the situation today .
Folks, has anyone seen anything to suggest the following is effected:
Spouse A files for Social Security on their own benefit
Spouse B then files for Social Security on Spouses A benefits and defers taking theirs to a later date
Spouse B files for their own benefit at age 70.
There is no filing and suspension.
I doubt anyone has an answer but given the following scenario;
Spouse A is 67 1/2, his FRA benefit was$ 2,300 but since he hasn't filed yet it is now it is $2,576 or 12% for an increase of 12% over the FRA benefit.
Spouse A has always had the goal of waiting to age 70 to collect $3,036 or 32% more than the FRA benefit.
Spouse B is just turning 66 and the thought was for Spouse A to file and suspend so spouse B can collect 50% of Spouses A benefit or $1,150.
Spouse B has a FRA benefit on their own of just $600. What if Spouse B files at FRA to collect the full $600 benefit and Spouse A files for 50% of spouse B's benefit or $300.
Losing $250/month but in the meantime Spouse A's benefit will continue to grow.
At age 70 Spouse A collects his $3,036 at which time spouse B drops her benefit opting to take 50% of spouse A's FRA benefit of $2,300.
Looks like the couple will be losing $3,000/year for 2 1/2 years which is a lot better than losing $50k.
actually michael kitces answered it today , that is restricted application and not file and suspend that tuborg asked about .
as long as the spouse is 62 in 2015 they can do a restricted application . anyone younger can only get their own , period no matter what age . the only thing they can get is that spousal adder like a spouse does now when they file pre fra and 1/2 the other spouses is larger then their full .
Luckily, I turn 62 next month and have filed for myself, my 10 year old and my 7 month old boy's. I will still be able to suspend from 66-70 and my boy's will continue to get their regular payments!
So the folks really being squeezed are those younger than 62 already retired who had any of these strategies in their plans. This will defer retiring for a number of people especially those with pensions. Ouch for higher salaries and gov't/corporate payroll costs and job opportunities for younger workers. Any reduction in retirement income will just make more retirees from Illinois, Jersey etc head south.
They know this bill will draw huge numbers of anti views once people have chance to read and analyze the proposed bill
The idea that it will offer an ameliorated COLA for those who likely will be facing the brunt of Medicare increase won't take the stink out of most of the changes...
I can't see how most of Americans will view this as any kindness...
And it seems to be viciously retroactive to some of those receiving benefits...
I bet it sees major revision now that it is being analyzed...
I know my husband and I will be hurt by it because we have waited and tried to be prudent.
Many prudent people who are willing to delay (allowing the government to use the money the seniors are not yet drawing) will be hurt by this, especially when one person in a couple has earned significantly less by perhaps earning most of their money years ago when salaries were lower.
Yet those forced to collect Social Security at age 62 because they are acting as full-time caregivers for aged family members are given NO break by Congress. That, in spite of a bill that has been introduced unsuccessfully year after year that would stop the financial penalty against those people (usually women and often SINGLE women who already have low lifetime earnings). People who voluntarily do what many praise as "the right thing" by enabling the infirm elderly to remain at home instead of in care receive a lifetime punishment in terms of their future SS payments.
What a nightmare such a thing would be to administer. Who would determine if someone is a full-time caregiver and who would track whether they remain so? What would prevent someone from claiming to be one even if she isn't? How much would it cost to hire enough investigators to keep the system honest?
I'm not convinced it is desirable to set aside actuarial soundness to help those who have made the choice that it is "the right thing" to keep the infirm elderly at home. That is a very individual choice which I don't think merits government subsidy. It is not a "punishment" that monthly benefit payments are lowest at age 62 and step up some with every year of delay (up to 70) because the person taking benefits at 62 will be receiving them for more years. It is simply a way of offering options to people, a way of creating flexibility in the system.
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