Restricted Filing: Changes to Social Security May Affect Retirement Planning

In 2015, Congress passed the Bipartisan Budget Act of 2015 which put an end to Social Security strategies that allowed couples to grow their spousal benefits. The two strategies “file and suspend” and “restricted filing” were used by married couples and were known as “claim now, claim more later.”

Restricted Filing

 The Congressional legislation banned restricted filing for individuals under the age of 62 as of January 2016. Restricted filing allowed an individual who was eligible for both a spousal benefit and a retirement benefit to choose just the spousal benefit at the retirement age of 66. Thus, the benefit could continue to grow at 8% each year and then that individual could opt for a larger benefit at any time up to the age of 70.

Despite these changes, there are still ways to grow your Social Security benefits. One method of accomplishing this is by deferring your payout. Because Social Security grows by 8% each year between your retirement age (usually 66 or 67) and 70, you can amass a sizeable increase if you choose to defer. Deferring payment also helps spouses by increasing the Social Security survivor benefit.