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lev-tax
lev-tax, Tax Advisor
Category: Social Security
Satisfied Customers: 29535
Experience:  Taxes, Immigration, Labor Relations
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I am turning 62 in July 2016 and our financial advisors

Customer Question

I am turning 62 in July 2016 and our financial advisors suggested I should file for ss and then my husband who is 66 can get spousal benefits until he is 70 and files for his own benefit. We are both still working and plan to continue for a couple of years. The ss office told my husband he can't do this because we are working and make to much money. What is the answer?
Submitted: 11 months ago.
Category: Social Security
Expert:  lev-tax replied 11 months ago.

If you turn 62 - you become eligible for social security benefits - you may start benefits either based on your own working record - OR based on your spouse's working record - spousal benefits - that are 50% of whatever you spouse is entitled.

You may work and receive social security benefits at the same time - that is not an issue.

However - as you are below your full retirement age (66)

- your benefits will be reduced compare to whatever you were entailed at your full retirement age

- your earned income is limited - and if your wages are above certain threshold - the SSA would reduce your benefits.

.

Your husband is 66 - means - at full retirement age.

He may be entitled to benefits either on his own working record OR spousal benefits (50% of your benefits)

Generally - he would select whatever benefits are larger.

But he may choose spousal benefits.

HOWEVER - if your husband will receive ANY benefits - hes own benefits will NOT grow.

If he want to have his own benefits delayed and grow 8% per year - he would need to suspend any benefits.

Questions?

Customer: replied 11 months ago.
What if he filed a restricted application?
Customer: replied 11 months ago.
The whole point of this is that he will delay taking benefits which will continue to grow until age 70
Expert:  lev-tax replied 11 months ago.

"restricted application" filed AFTER May 1, 2016 would NOT allow to keep benefits growing and receive benefits at the same time.

The law was changed to eliminate such proviusion.

Expert:  lev-tax replied 11 months ago.

Under theoldt law when you reach the FRA (full retirement age) - you may file a restricted application. The restricted application allows you to delay your social security benefits and keep them grow till age 70 and you become eligible to claim a spousal benefit based on YOUR spouse s earnings record.

The law which we are discussing is The Bipartisan Budget Act of 2015 on 11/02/2015 it Became Public Law #114-74

Here is the document - so you may review by yourself.

https://www.congress.gov/114/plaws/publ74/PLAW-114publ74.pdf

However that specific provision will be in effect starting May 1st of 2016.See SEC. 831. CLOSURE OF UNINTENDED LOOPHOLES.

on page 26 in this document.

Let me know if you need any clarification this matter.

Customer: replied 11 months ago.
I am very confused. We have been told that filing a restricted application will allow the person to claim spousal benefits and their own social security will continue to grow until age 70. My husband DOB is January 1950. My birth year is 1954 which I understand will be affected by the new law. Can I continue to work, making far more than the 15,700 allowed, and file for my benefit and then my husband files a restricted application and takes a spousal benefit until he reaches age 70. His social security would continue to grow at 8% per year until age 70. At the moment we are both working, will this be a problem or should we wait and take ss at age 66+ and age 70?
Expert:  lev-tax replied 11 months ago.

We have been told that filing a restricted application will allow the person to claim spousal benefits and their own social security will continue to grow until age 70.

That WAS correct - but such provision was eliminated starting May 1, 2016.

Can I continue to work, making far more than the 15,700 allowed

Yes - you may work and receive your social security benefits at the same time.

However - because you are below your full retirement age (66) - your benefits will be reduced - The SSA will deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2016 that limit is $15,720.