In addition to other Social Security changes in the budget, Congress targeted methods that permitted beneficiaries to increase their own Social Security benefits while collecting their spouse’s checks. Waiting to collect benefits yields a larger payout- after full retirement age (currently 66), benefits increase 8 percent per year until age 70.

Losing this option could be costly for seniors- some couples can make up to $60,000 filing this way. But for the government, the cost is even greater: if everyone took advantage of these loopholes, the cost to the Social Security Administration would be over $9 billion.

These are the two main strategies outlawed by the budget rules:

File-and-suspend: This loophole allowed a person to file for benefits and suspend those benefits right away. Their benefits would grow by a small percentage while they collected their spouse’s benefits.

Restricted application: Filing a restricted application at age 66 (or full retirement age) would let a person collect their spouse’s benefits while their own benefits grow untouched.

The law will go into effect May 1, 2016. After this date, these strategies will not be available. If you will be 66 before May 1, 2016, you have time to take advantage of these strategies before they are longer an option. The law will mostly affect new retirees, who will not have the strategy available to them.

Budget will end options that allowed married couples to maximize benefits

To read more about File-and-Suspend, see this Forbes article.

See this piece from the Washington Post for more background on the stratgies and other options for claiming benefits.

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