Important Social Security Changes and the 4/30/2016 Deadline

by Matt Ahrens

It was the evening of October 1, 2015, and I was taking questions after completing a successful Social Security Optimization presentation.  The question was expected:  Are my Social Security benefits safe from Congress?  My answer was succinct and confident:  Congress will be making changes to Social Security eventually, but there is no way those changes are going to impact anyone in this room. 


One month later Congress sent President Obama an updated budget that included significant changes to Social Security, and almost everyone in that room was impacted.  Unfortunately, while many have heard that changes were made to Social Security, there are few that understand what those changes mean…and far fewer that know there is a six month deadline attached to some of those changes.


To understand the following changes you must understand the Social Security lingo.  File and Suspend is a popular strategy among Social Security-eligible retirees because you must file to allow auxiliary beneficiaries (i.e. spouse or qualifying child) to claim a portion of your benefit for themselves.  However, if you do not want to take your benefit at this time, then you simply file for benefits and then promptly suspend them to allow your own benefits to continue to grow.

A Restricted Application is a great tool to maximize Social Security benefits but you have to be at your full retirement age (66-67) to access it.  Usually when you apply for Social Security benefits you are applying for the greater of your own benefit or your spousal benefit.  A Restricted Application allows you to start taking spousal benefits, while allowing your own benefits to continue to grow.  Generally you would receive the spousal benefit until age 70, when you would flip back to your own benefit which had been growing by 8% each year.


If you were born on or before May 1, 1950 you:

  • CAN suspend your benefits, and auxiliary benefits can continue to be received by family members.
  • CAN file a restricted application.
  • MUST file and suspend on or before April 30, 2016 if you are planning to do so.


Let’s look at a quick example for this group which will be 66 before this six month grace period is over.  Joe, 66, and Jan, 66, are looking to maximize their retirement benefits.  Joe has the higher benefit so he wants to defer as long as possible, and Jan wants to start taking her spousal benefit.  In order for her to have access to her spousal benefit Joe will have needed to file, but he can file and immediately suspend provided he does so before April 30, 2016.  Even though Joe is deferring his own benefits, he can file a restricted application and receive half of Jan’s benefit now and then turn his own benefit on at age 70.

If you were born after May 1, 1950 but before January 2, 1954 you:

  • CAN suspend your benefits, BUT suspending your benefits will suspend any auxiliary benefits being received by family members.
  • CAN file a restricted application at full retirement age.


In our example above, if Joe was 63 then even though they have access to the restricted application, if Joe suspended his benefits to allow them to grow to age 70 then Jan would not receive any spousal benefit.  This may force some clients to turn on their Social Security benefits earlier than they wanted.

If you were born on or after January 2, 1954 then you:

  • CAN suspend your benefits, but suspending your benefits will suspend any auxiliary benefits being received by family members.
  • CANNOT file a restricted application. 



It was often stated that these “Social Security loopholes” were being utilized by the wealthiest of Americans who had the financial resources to defer Social Security benefits as needed.  Unfortunately it will be the middle class that feels the most pain.  High income earners generally have the resources to make up the difference that they won’t be receiving from Social Security and low income earners were generally already taking Social Security at age 62.  Among our clients who we have recalculated their Social Security benefits, the average married couple will receive between $50,000 and $60,000 less in total benefits. 

Single filers can also be hurt.  In the past, an individual could file and suspend their benefits at age 66 and defer to age 70.  But what if the individual had a major health scare or large expense?  They could file for a lump sum and receive the total benefits that they had deferred and continue as if they had started taking benefits at age 66.  This option is now lost if not utilized before April 30, 2016

To learn how this may impact your Social Security benefits please call our office or visit our Social Security page on our website.  We offer a free online calculator that will help you determine the strategy that offers the maximum benefits.

November is National Family Caregivers Month and a Good Time to Plan for Long-Term Care

By presidential proclamation, November is National Family Caregivers Month. Each day, parents, children, siblings, and spouses selflessly sacrifice their time and energy to care for family members affected by illness, injury, or disability.  Caregiving can exact an emotional, physical, and financial toll. It is important for caregivers to know that their labors of love are appreciated, and to recognize that they need care and support as well.

Caregiving often involves providing for the needs of our older population. As the number of older Americans rises, so will the number of caregivers. While we take this time to recognize our caregivers, it's also a good time to consider planning for long-term care. According to the U.S. Department of Health and Human Services (, almost 70% of people over age 65 will need some type of long-term care during their lifetimes. Between the ages of 40 and 50, on average, 8% of people have a disability that could require long-term care services. The average yearly cost for long-term care in a nursing home is about $74,820 for a semiprivate room, while the average annual cost for care in an assisted-living facility is $39,516.


“A day of worry is more exhausting than a day of work."

                    John Lubbock

" A good leader takes a little more than his share of the blame, a little less than his share of the credit."

                   Arnold Glasow

Quotes selected by the IAG Staff

“Worry never robs tomorrow of its sorrow, it only robs today of its joy.”

                   Leo Buscaglia

“One person caring about another represents life’s greatest value.”

                   John Rohn


Tony Moeller, CPA

The information listed in this commentary is a compilation of various publicly available sources and is for informational purposes only. It is not a recommendation or solicitation of any particular investment or strategy. A risk of loss is involved with investments in the stock and bond markets.

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