The Bipartisan Budget Act of 2015, passed by Congress and signed by the President, includes significant changes to Social Security's rules. To quickly summarize the impact (text courtesy of Dr. Laurence Kotlikoff, Professor of Economics at Boston University, and author of the online tool Maximize My Social Security):
No one can collect a spousal or child benefit based on the covered earnings record of a worker who suspends retirement benefits after April 29, 2016 during the period that the worker's retirement benefit remains suspended. Those born after May 1, 1950 cannot file and suspend within this window, and those born on or before May 1, 1950 must request to suspend by April 29, 2016 to allow auxiliary benefits to be claimed on his or her record while their retirement benefit is suspended.
No one who requests to suspend his or her retirement benefit after April 29, 2016 can collect an excess spousal or excess widow(er)'s benefit while their retirement benefit is suspended.
For those born on or after January 2, 1954, deeming is extended through age 70. Deeming is the requirement that if you take your retirement benefit and are eligible for a spousal benefit or a divorced spouse's benefit, you need to also take your spousal benefit and vice versa. This leaves you with roughly the larger of the two benefits.
Those who suspend their retirement benefits can no longer receive their suspended retirement benefits in a lump sum payment.
The impact varies depending on whether you were born on or before May 1, 1950, born between May 2, 1950 and January 1, 1954, or born on or after January 2, 1954. If you are a current client of Stout Bowman, we have access to the Maximize My Social Security tool, and suggest you give us a call, so that we can help you analyze the best claiming strategy for your particular situation. For more information about Social Security planning, you can also read this article on our website.