Once upon a time a married worker could file for Social Security benefits at full retirement age and then suspend the benefits, allowing the worker’s spouse to begin drawing spousal benefits while the worker postponed receiving benefits until a later date resulting in higher benefits due to the delay in drawing. The strategy was known as “File and Suspend,” and it resulted a substantial monetary gain for couples who used it.
But “File and Suspend” is a thing of the past as a result of the budget signed into law November 2, 2015. Under the new rules, effective April 30, 2016, a spouse cannot begin receiving benefits until the worker is actually receiving benefits, too. Workers can still file and suspend, but the spousal benefit suspends along with worker’s benefit.
The law does not affect those already electing “File and Suspend” or those who turn 66 prior to the effective date who elect to “File and Suspend” before April 30, 2016.
Another strategy known as “Claim Now, Claim More Later” has been eliminated. That strategy allowed a spouse who takes benefits at full retirement age to choose whether to take spousal benefits or benefits on his or her own record. This allowed a higher-earning spouse to claim a spousal benefit at full retirement age and then switch to draw his or her own retirement benefit instead at age 70. Under the new law the worker cannot take spousal benefits and let his or her benefits continue to increase. An exception to this is the election allowed by a surviving spouse who will still be able to choose to draw on the deceased spouse’s account first and later switch to a larger retirement benefit.