The Mature Investor

The New Rules to Social Security: Be Prepared in 2016

Posted by Leon Simoneau on Sun, Nov 22, 2015 @ 21:11 PM

SS Benefits Application resized 600We all know that one of the certainties of life is change. This surely is true with most programs or policies in which the federal government is involved.

This year, the Bipartisan Budget Act of 2015 was signed into law on November 2nd by President Obama. If you haven’t heard, within that Act, there were significant changes to strategies for claiming your Social Security which are aimed at closing some of the “unintended loopholes”.

Were there actual “loopholes”?

The questions you should now be asking yourself include “Are there loopholes in our tax code?”  “Should my accountant be aware of these and try to limit my taxes within the confines of the law?” Claiming your Social Security benefits have similar complexities, yet many people I coached took full advantage of these strategies and opportunities. Those who have one-on-ones with me, most likely have discussions on Social Security election strategies. We discuss the future maximization of that lifetime income stream for you (and spouse) so as to preserve your life savings. Unfortunately, some of those strategies have been eliminated and will no longer be available to many of you.

The Pros of this Change

  • The changes will save Social Security billions of dollars. (Although actual numbers may vary)

  • Those that were sure they were taking Social Security at age 62 due to concerns that this benefit/program would run out of money, may need to rethink their strategy.

  • This change starts the conversations needed to keep the system solvent.

  • It does not affect rules for single people, widow benefits, or delayed credits - which means waiting to take your benefits in order to receive a larger amount.

  The Cons of this Change  

  • Deemed Filing: If you are not 62 years old by the end of 2015, this new rule applies. When you file for Social Security, at Full Retirement Age (FRA), you cannot file a restricted application.  This means you cannot take your spousal benefit at FRA and let yours benefit grow to 70, only then to switch to yours. Social Security will just give you the larger of the two amounts at filing.  Also, if you take it before FRA, the spousal benefit will immediately pay out when your spouse applies, no longer making it an option for you to wait until FRA and get the full benefit.

  • Typical File & Suspend Eliminated: As of 5/1/2016 you can no longer (A) “unsuspend” benefits to get a lump sum or (B) receive benefits on someone else’s work record while yours are suspended. In addition to that, no one else can receive benefits on your work record while your benefits are suspended. (This includes spouses, ex-spouses, and dependent children.)

Confusing? Yes it is!  Even more than it was prior to the rule changes. Seniors calculating budget resized 600With the rule changes, it is imperative you elect Social Security correctly for your family’s situation.

Remember: Always check with a representative from your local Social Security office to verify any strategies you are considering. If you will be age 66 or older prior to 4/29/2016, you may want to consider your “File and Suspend” options in order to lock those in.

When planning for retirement, everyone’s situation is unique. It is critical to get individualized and accurate coaching for yourself first. For more information, please contact Leon Simoneau at or 1-603-321-3176.

Topics: Leon Simoneau, Social Security election, 2015, Federal employees, planning