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How the New Social Security Claiming Rules Affect You

Category: Financial and taxes in retirement

November 16, 2015 — The biggest change affecting Social Security benefits in at least 15 years is about to go into effect on April 30, 2016. It is a change that could cost certain beneficiaries $50,000 over a lifetime. As with any major change to a benefit program there has been a lot of confusion over who is affected and how – this article will explain how it will affect you.

We were fortunate to have Kurt Czarnowski, a 34 year veteran employee of the Social Security Administration and leading expert on the subject, explain the changes to us in practical terms. Here is what we learned from Kurt about how various groups are affected.

File and Suspend and Restricted Benefit
The Budget Bill passed by Congress and signed by the President in early November included changes to the Social Security program. Their ostensible purpose was to close loopholes and protect the long term financial health of the system. The biggest changes to most beneficiaries are to the popular claiming strategies known as “file and suspend” and “restricted benefit”. Knowing the differences between these strategies is key:
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File and Suspend. This strategy allowed beneficiaries to “file” for their SS benefits, and then immediately “suspend” them. By filing, the person’s spouse can then receive spousal benefits. By immediately suspending his own benefits, the original spouse can continue to accrue an 8% per year increase up to the year when benefits are maximized, age 70.

Restricted Benefit. This claiming strategy is slightly different from the above. In this case you don’t file for your own SS benefit at FRA. Instead, you merely claim your spousal benefit based on your eligible spouse’s earning record (your spouse has to have filed for benefits, however). By using this strategy you can continue to accrue on your own earning record up to age 70.

Benefits not repaid after April 30, 2016
One big change to the law affects EVERYONE after April 30, 2016. If you ask to have your payments suspended after that date you will no longer have the option of asking to have any and all benefit payments that have been suspended repaid to you in a lump sum. Suspended benefits will only be resumed prospectively; i.e., effective with the month after the month the request is made to SSA.

Your birthday affects claiming strategy control
The easiest way to understand how the changes affect you is to look at it by your age.

At Full Retirement Age by April 30 or currently under File and Suspend
If you are currently at Full Retirement Age (66) or over and using the File and Suspend strategy the law will NOT impact you in any way. Similarly, if you reach FRA and File and Suspend before April 30, when the law goes into effect, you are not impacted. Early versions of the law made it look like this strategy would be terminated in 90 days, but that was corrected in the final law, according to Czarnowski. To summarize: if you can take this strategy by April 30, 2106 your spouse can receive a spousal benefit while you are having your payments suspended in order to earn Delayed Retirement Credits. If you suspend benefits after April 30 anyone who receives benefits from your record will also have their benefits suspended (there is one exception; divorced spouse’s will be able to continue receiving benefits).

Born January 1, 1954 or earlier
If you were born by Jan 1, 1954 (meaning you will be at least 62 in the year the new law goes into effect), you still have one of the benefits available under the old rules. That is, you still have the right to file a “Restricted benefit application” and just claim benefits on the earnings of your eligible spouse and continue to accrue 2/3% increase per month on your own earnings record. But again, your spouse must have applied for his or her benefit to be eligible.

Born after January 1, 1954
Anyone who was born after January 1, 1954 will NOT have the option to file a restricted benefit and continue to accrue on their own earnings record. You will be subject to “deemed filing” rules even after reaching FRA. The deemed filing rules say that if you are eligible for a your own retirement benefit and a spousal benefit at the time you apply, you cannot claim one without claiming the other. You are “deemed” to be applying for both at the same time, so the SSA will decide for you which is the highest benefit and give that to you.

An opinion about these changes
We asked Kurt for his opinion about the changes to the Social Security program, which its sponsors believe is an attempt to close a loophole in the system and buttress the financial health of Social Security. Kurt is dismayed by the changes to Social Security, which he calls a social insurance program. He thinks the new changes could have “unintended consequences” for the group that has some of the biggest financial challenges in retirement – elderly single and divorced women. As he sees it, the current program helps counter the natural tendency of people to take their benefits as soon as they can. It helped encourage at least one person in the couple to delay taking their Social Security benefits, which helps get them a higher benefit, maximized at age 70. While waiting the extra few years might or might not be of benefit during the man’s (in most cases the higher earner) lifespan, the increased monthly payments could be a significant benefit for his survivor, who will then get 100% of the man’s benefit. If people take their benefit early, that could mean their widows, who generally live longer than men, will lose out on tens of thousands of dollars during their final years.

What Should You Do?
If you are still eligible for file and suspend or a restricted application, the decision to take advantage of that strategy, or not, is yours. In our interview Kurt was clear about his role in providing information to prospective Social Security beneficiaries. He is not an advisor (and neither is He does want to help people understand the options and make an informed decision. Then whatever they decide is fine with him.

The most important thing that hasn’t changed
If you are not already receiving your Social Security benefits, there is one thing that the new law does not affect, no matter what your age. That is your decision as to when to start taking benefits – whether it is as soon as you are eligible at age 62, at FRA (66 for most people), or at any time up to age 70, when your benefits stop accruing. In our opinion, if you can possibly afford it you should consider delaying taking your benefits until age 70. Each month you wait is worth a 2/3% increase to the benefit that not only you will receive for the rest of your life, but also your spouse as long as he or she lives. Kurt believes taking your benefits early is not always the best decision.

For further reading
See Vanguard article on claiming strategy changes
Social Security Administration: Suspending Retirement Benefits

Comments? Please let us know in the Comments section below how the changes to this law will affect your decisions about Social Security. We have reprinted there an excellent question from our original post about this issue from Ann, along with Kurt’s response. It also includes a great tip for how to file and suspend.

Czarnowski Consulting
Kurt Czarnowski is currently the principal in “Czarnowski Consulting,” a retirement planning company which provides “Expert Answers to Your Social Security Questions.”

Czarnowski is the former Regional Communications Director for the Social Security Administration (SSA) in New England, a position he held from December 1991 until his retirement at the end of 2010.

Posted by Admin on November 16th, 2015


  1. Our original article that announced the Budget Bill’s impact on File and Suspend generated many comments and questions. Reprinted here is an excellent question from Ann and the answer from Kurt:

    Ann: If I’ve read the new rules correctly I think my husband and I will still be able to use file and suspend/restricted application. My husband turns 68 in December and I turned 63 this past June. We both still work. My husband plans to retire when he turns 70 in two years and I’ll retire six months later at 66. My husband hasn’t applied for Social Security yet, but based on the new rules I think he now has to before April 2016 and then suspend his benefits. If he does that I believe I will be able to file a restricted application when I retire at 66 and collect on his benefit while mine continues to grow to 70. Can anyone confirm that?

    Also, does anyone know how to file and suspend? I know you can apply for Social Security benefits online but the only thing I could find about suspending benefits was a paper form you fill out and mail in. I’m a little wary about doing that. Would it be better to go to a Social Security office, apply in person, and suspend at the same time?
    Ann, we asked Social Security expert and consultant Curt Czarnowski, who we recently interviewed for an article on this topic about your question. Here is what he said:

    Because she will be at least age 62 by the end of this year, she will still be able to file a restricted application and collect a spousal benefit off of her husband. And, as long as he files and suspends before next April 30th, she will be able to receive the spousal benefit even if he is not actually collecting anything because he has asked to have his payments suspended.

    Here’s the thing, though. He will have reached age 70 and started collecting when she hits her FRA, so his payments won’t be suspended at the time she files the restricted application. Thus, he really doesn’t have to worry about filing and suspending before next April 30th in order for her to collect spousal benefits. However, filing and suspending before the deadline might still be advisable in case a situation arises where he would like to have any suspended benefits repaid to him in a lump sum. If he waits beyond April 29th to file and suspend, this will no longer be an option.

    In answer to the second part of her question, you “file and suspend” via the remarks section of the online application. Once you have completed the application (using the biggest, boldest font possible) you simply add a sentence in the remarks section to the effect: “I wish to have my monthly benefit payments suspended in order to earn Delayed Retirement Credits.” That’s all there is to it.

    by Admin — November 16, 2015

  2. Thanks for the article. I am 64 and decided to take my benefits now rather than waiting to I’m 66 or 70. Here is my reasoning and I was wondering if Kurt could chime in and see if my math is right. I am collecting $1532/mth now and at 66 my benefit would be $1,746 and at 70 my benefit would peak at $2317. Lets assume I’ll live until I’m 85. My total benefits from age 64 to 85 would be $386,064. My total benefits from age 70 to 85 would be $417,060. So the difference of taking benefits now or waiting 6 years (age 70) is $30,996. If you spread that difference over the course of 21 years (252 months), I would be losing only $123 a month. If I die at 80, I am ahead of the game. My total benefit at 70 is $278,040 vs. $294,144 at 64. So, it’s all a gamble but I am willing to lose $123/mth in order to have income now for the next 6 years. I didn’t consider any cost of living increase since that isn’t a sure thing, What are your thoughts?

    by Tom — November 17, 2015

  3. Kurt – the cut-off date to still implement the file & suspend option is 4/30/16. This date is 180 days from 11/1/15 when Congress passed the new regs, which I understand called for this “loophole” to be closed “at least” 180 days from date law passed. For those of us who just missed out on this option by a few months, is there any chance this 4/30/16 date might be extended, since law did not specify a date certain, but rather “at least” 180 days? IRS has not released final instructions to anyone yet, so do they have any discretion to do something longer than 180 days?
    Thanks for your contributions to this great web site!

    by EIBfan — November 17, 2015

  4. I plan to take Social Security at FRA (66) during summer 2016, and will keep working. The Social Security website says that my monthly payment will increase since I’ll continue to pay into the system. Has this been changed by Congress? BTW, if my job pays me above a certain level, I won’t apply for SS as long as I work, up to age 70. I’m sending out my CV in the next few weeks so I can line up a job before I leave my current one. I need to relocate to take care of my elderly father.

    by Elaine C. — November 18, 2015

  5. I was a but worried for a while until I learned that those of us who have already taken the benefit are unaffected. I took it 2.5 years ago. I only have 18 months before I collect my own SS. The extra benefit was really important to me. I feel like my contribution of staying home to raise my very young children finally got some financial recognition. I got paid about $12.5K for each of four years.

    by Lulu — November 18, 2015

  6. I am currently 60 and will reach FRA before my husband. My income is less overall, than his. The dates indicate that I can file as “deemed,” meaning they will take my SS payout then bump me up to the spousal amount since that it higher. Will I get that total amount when I file or do I have to wait the 2 more years until he can file. Will they give me my lower amount then bump me up when he files? Still confusing, but we’re trying to plan ahead.

    by Flatearth6 — November 18, 2015

  7. I turned 67 this past September. My wife will turn 62 on May 1, 2016. Our plan was for me to file and suspend (my benefit is significantly greater than hers). Question: If I file and suspend by April 30, 2016, can she file in April 2016 to start getting 35% of my FRA benefit?

    by Spot — November 18, 2015

  8. I am 60 and plan to begin taking survivor benefits (not sure if this is the right terminology) based on my deceased ex-husband’s earning record soon. Do these changes impact survivor benefits at all?

    by Deb — November 18, 2015

  9. I will turn 66 in February, 2017. Do I need to file and suspend, or just wait until 2017 to file?

    by John Schulte — November 18, 2015

  10. I am 77 & have recently taken a part time job. Obviously I’m receiving my SSN benefits. What happens to the part time SSN taxes taken for my current job ? Thanks,


    by Bill Hefferan — November 18, 2015

  11. Dear Mr. Czarnowski,

    I will be age 66 on April 18, 2016 and very interested in doing the file and suspend program which according to the article I will still be eligible. I have been the high earner in the marriage and intend to maximize my and my wife’s survivor benefit by not taking my benefit until age 70. My wife is 5 1/2 years younger than me and will be age 60 1/2 at my 66th birthday. Can we still do the file and suspend approach? Does this make financial sense?
    Thank you.

    Myles Dotto

    by Myles Dotto — November 18, 2015

  12. Dear Readers

    We didn’t want anyone to get the impression that Kurt was available on this Blog to answer individual questions. That would be asking quite a bit. Many of the queries posed here are good ones. In many cases if you read the article carefully you will get a good idea of the answer. If it is not clear you should ask your Social Security office or your financial advisor for an interpretation.

    by Admin — November 18, 2015

  13. Can you confirm, if I have filed and suspended my SS benefits, so I am not having my Medicare costs taken out of my SS benefits, will my Medicare costs jump substantially? As compared to if I take my benefits and have the Medicare cost taken directly from my benefits.

    by Gene Wachholtz — November 18, 2015

  14. I worked for SSA for 39 years, retiring in 2013. While I can respond to some of the questions, people with detailed questions about the file and suspend changes should contact SSA at 800-772-1213 between 7 am-7 pm.

    I find Kurt’s comment to add a suspend request to an online claim in “the biggest, boldest font possible” incredibly insulting to SSA employees. I would encourage most people to call the 800# to schedule an appointment to file by phone or in-person. The individual filing options can be complicated so online filing is not the best option fior many people.

    Tom, I didn’t check your math, but the way you compared your options at 64, 66, and 70 makes sense. You also have your benefits to invest, save, or spend for 6 years longer by taking them at 64 rather than 70.

    Elaine C and Bill, recomputations due to additional earnings have not changed. Retirement benefits are computed using your highest 35 years of work. Earnings in past years are indexed in terms of today’s dollars, however, so your benefits may already be based on 35 years of work that are valued higher than your current work. If you had less than 35 years used, the additional earnings will definitely be factored in. If a person works after receiving benefits, SSA automatically checks each year to see if additional benefits are due.

    Lulu, aged spouse’s benefits are intended for non working spouses and spouses whose benefit amount is less than 50% of the higher earner’s benefit. It was your choice to stay home with your children when they were young. Delaying filing on your own account while receiving spouse’s benefits is taking advantage of an unintended windfall, not “financial consideration” you deserve.

    Flatearth6, your husband must file an application before you can receive spouse’s benefits on his account. Only divorced spouses can be independently entitled without the ex-spouse filing as long as both are at least age 62.

    Deb, there are no changes in survivors’ benefits. A widow(er) can file on one account while waiting to file on the other account. However, only widow(er) benefits can be paid between 60-62 and only retirement benefits can accumulate delayed retirement credits. It’s important that widowed people understand their options.

    Gene, for “hold harmless” to apply, a person must receive benefits in November and December 2015 and have Medicare premiums withheld from those benefits. “Hold harmless” doesn’t apply if you are subject to the income adjusted Part B premium. People held harmless now need to understand that future COLAs will be applied to the Part B premium until they are paying the new base amount.

    As the website administrator already pointed out, questions should be referred to SSA rather than left here.

    Administrator’s Comment: Thanks Jean, you have been incredibly helpful to share your expertise with our members. Thanks!

    by Jean H — November 19, 2015

  15. Thanks for taking the time, Jean H.

    by Tom — November 19, 2015

  16. Jean H – yes, thank you for taking the time to try and answer questions however, perhaps I didn’t make myself clear. I was asking if I could take my own SS at FRA then take the spousal amount when my husband files – 2 years after me. Or am I locked in to my own, lesser amount forever if I file first?

    I realize everyone’s situation must be different and it is all “clear as mud” for most. These discussions are helpful though! Lets keep talking!

    by Flatearth6 — November 19, 2015

  17. I’ve never heard of suspending payments! I just learned something new. I am divorced, 68 years old. I started taking my SS at age 65. I learned recently that I could have gotten SS from my divorced spouse’s account (we were married for 12 years). Is it too late to file that way? I would get more per month from 50% of his SS than what I get on mine.

    Thank you for any information on this, even if it is a “NO!”

    by BJ — November 19, 2015

  18. Jean H., thank you sharing information. This helped me understand much more what my financial future currently is and what I can do to make it better, while still helping my father and “retiring” from my current situation. I appreciate your time and knowledge very much.

    by Elaine C. — November 20, 2015

  19. Jean
    I could not have aforded the child care for my children under school age. I had no choice but to stay home with them.
    My point was that I was glad that the rule did not change while I was in the middle of taking that benefit. AND IT WAS MY BENEFIT! My ex-spouse could have taken the same benefit and may have done so at the time. If the change came while I was still planning my finances for retirement then I would not have included that in my plan.
    I did not join the workforce until after I had gone to college after my divorce. My ability to earn increased dramatically when I finally went to work. But I did not start working until I was 40. That means that I need to work far longer on the other end to have enough money to last retirement. As a matter of fact, I still work part-time and will continue to do so until I am 70…when I can finally take my own social security… and it will still be less than my ex-spouse.
    Please don’t judge another’s situation. Walk a mile in their shoes.

    by Lulu — November 25, 2015

  20. Responding to Tom’s comment above, “So the difference of taking benefits now or waiting 6 years (age 70) is $30,996” is how I use to look at social security, from a breakeven perspective. Tom is wondering about leaving $31 thousand on the table. Then someone mentioned to me a different perspective. If you die before the breakeven date, really, what do you care? If you had been able to live as comfortably as you wanted, what would that $31k have done for you? But if you live past the breakeven date, obviously you would be better off.

    by David Ecker — November 25, 2015

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