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By Christine Benz | 05-04-2016 02:00 PM

Making the Most of Social Security After Rule Changes

File and suspend and restricted application are going away, but there are still strategies you can use to increase your payout, says Social Security's Andrew Salata.

Christine Benz: Hi, I’m Christine Benz for Morningstar.com. Changes are afoot for Social Security. Joining me to discuss the recent changes and what they might mean for retirees' plans is Andrew Salata, he’s a public affairs specialist with the Social Security Administration.

Andrew, thank you so much for being here.

Andrew Salata: You are welcome. It’s always great to discuss Social Security and the changes. Just so everyone can be ready and prepared for it, because that’s what we are all looking forward to in our work careers.

Benz: Right. Let’s discuss some of these changes starting with file and suspend. First, what is that strategy and how has it changed or essentially gotten off the table going forward?

Salata: I guess I’ll start with what our old rules were.

Benz: Right.

Salata: So for those that had already filed and suspended their benefits or have contacted us prior to April 29, they fall under the old rule where if an individual files and suspends at full retirement age, they earn their delayed retirement credits, but we’re also able to pay family members--a spouse or dependent children on the record--while their benefits are suspended.

Benz: So the basic idea was if you are a higher-earning spouse, you file for benefits then suspend and continue maybe working, delaying your eventual filing and receipt of Social Security, but it starts that spousal benefit flowing into the household.

Salata: Correct. Yes, because spousal or family dependent benefits do not get paid out until we--until the actual worker of the record files for retirement. So, for example, if I were at full retirement age and I had a spouse that’s eligible for Social Security benefits as young as 62, once I file I can suspend my benefits so I’ll be able to get delayed credits at 8% per year. This will allow my spouse to start receiving spousal benefits on my record. A spouse at full retirement age gets 50%. So reduced spouse at 62 would get about 37%.

Benz: So unless you initiated file and suspend, unless you had this already in process, this is not going to be available to people going forward.

Salata: Correct. So if you had not contacted us prior to April 30 or you are not 66 as of April 29...

Benz: Of 2016.

Salata: ...of 2016, then you are no longer able to partake, because once you reach your full retirement age that’s when you can file and suspend. And if it’s after our cut-off date the new rules kick in, and the new rule would be for those that are going to plan on file and suspend, because that hasn’t stopped. We'll still--you can still do the file and suspend to get the delayed retirement credits, but the advantages that I discussed are no longer there. If I were to file and suspend after April since, that will be when my full retirement age will be, as long as I’m in suspend status earning my delayed retirement credits, I cannot--none of my dependent spouse or family members would be eligible to receive payments during that time as well. So that’s the big change.

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