We've all been hearing rumblings over the years about how the social security system has problems, and needs reform. We may have even heard ideas from our politicians from time to time on how to do so, albeit a very sensitive topic politically. Sensitive because you're either strongly for reform (likely because you are young and if nothing changes you know you will never see a dollar of your money paid to you) OR strongly against reform (likely because you are collecting or nearly collecting and don't want anything to change because you know the change won't be better). When I served on a city council we named this "NIMBY syndrome". Everyone is progressive for change, as long as it's not in my backyard.
Well, our government leaders may have figured out how to get around this problem. What if we they just start making some changes and not really tell anybody ahead of time? Don't make a lot of noise about it...just tweak a couple things in this year's omnibus bill, and maybe a couple of more in next year's....and before you know it.....problem solved!
Indeed, is this what has just happened? On November 2, 2015, President Obama signed the Bipartisan Budget Act of 2015. One of the Act's most important features was its inclusion of significant changes to Social Security benefits and claiming strategies. While the authors of the bill may point to the enhancement of funding it provides for disability benefits, the downside for retirees is the change to the rules for a claiming strategy known as "file and suspend" and in turn for a restricted claim (collecting a spousal (ex too) benefit).
These strategies a bit complex, and now more importantly, short term, as this law repeals them. Yet, if you are or will be age 66 by April 30th 2016, and have not yet claimed your Social Security retirement, you need to take action. You need to look in to this matter by either calling either a trusted advisor or the Social Security Administration (800-772-1213) to determine how this may apply to you and what action to take. For most, its likely best to "file and suspend" before the April 30th deadline, but this requires your proactive action!
For the rest of us (those under 66), sit back and relax, as there's not much to do. While you investigate this further to learn what you never really had, and now have lost, what will you do with that information? While you can write your representative and push to repeal this change - whose backyard will you need to step on along the way?
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Securities offered through Royal Alliance Associates, Inc., member FINRA/SIPC. Insurance and investment advisory services offered through Focus Financial Network, Inc., a registered investment advisor not affiliated with Royal Alliance Associates, Inc.