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ScottyMacEsq, Attorney
Category: Legal
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Experience:  Licensed Texas General Practice Attorney
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I'm 79 years old. I have been receiving email about major

Customer Question

I'm 79 years old. I have been receiving email about major loss of Social Security benefits that will be taken away in May of this year unless I take some kind of action. What losses are they talking about and what mut I do in order to be "grandfathered in" ?
Submitted: 1 year ago.
Category: Legal
Expert:  ScottyMacEsq replied 1 year ago.

Thank you for using JustAnswer.

What type of action is it saying? Can you reproduce (copy / paste) the email here?

Expert:  ScottyMacEsq replied 1 year ago.

I see you have not responded in some time. Did you wish to continue with this question?

Expert:  ScottyMacEsq replied 1 year ago.

There's no increase in benefits. HR 1314 is a law that closes a loophole.

Changes to Social Security’s “file and suspend” rules are set to take effect on May 1, 2016, and some people do need to take action before that to “opt out” of new rules. Changes to Social Security usually create a lot of panic among those who rely on it, so it’s important to note upfront that NO changes will be made to how "core benefits" are calculated. In other words, if you already receive Social Security payments, these changes won’t impact your eligibility, or how much you receive.

Social Security changes set to take effect on May 1, 2016, pertain to its “file and suspend” rules. Congress approved the changes through the Bipartisan Budget Act of 2015 (HR 1314). Basically, the changes apply to spousal benefits and to switching from spousal benefits to worker benefits before the age of 70.

Under old rules, once a person reached the full retirement age (FRA) of 66, they could file for benefits and immediately suspend them until a later date. Then, a spouse age 62 or older could file for a spousal benefit and switch to a worker benefit until the age of 70. In the meantime, worker benefits for both spouses would continue to grow through delayed retirement credits.

The Bipartisan Budget Act makes two major changes to Social Security’s file and suspend rule. First, spouses will no longer be able to change from a spousal benefit to a worker benefit before the age of 70 — the beneficiary will immediately receive the larger of the two. Second, the act ends the ability of workers to file and suspend benefits to either trigger a spousal benefit, or to protect the right to retroactive benefits. But there is a loophole that allows some Social Security beneficiaries who are approaching retirement age to be grandfathered into the old file and suspend rule before May 1, 2016: If you will be 66 years or older come May 1, 2016, and you have not started your Social Security benefits, you should consider “filing and suspending” your worker’s benefits. If you are married, the filing part triggers your spouse’s right to begin spousal benefits. The “suspend” part signifies that you will not immediately receive your worker’s benefit and the benefit will be deferred until you choose to claim it. This will allow you to take advantage of the deferral credits, which increase your Social Security retirement benefits by 8 percent per year after full retirement age up until the age of 70. Please note that this must be done before May 1, 2016 because after this date, a married worker will have to file and begin to receive benefits in order to trigger the spousal benefit.

Again, there's no increase in benefits. There could be an increase in the very specific situation of someone who is approached retirement age (62 or so) and has not yet filed for benefits. The person can opt into the file and suspend method that is being phased out. That has to be done by April 30. But if you're already receiving benefits, there's nothing that will increase those.

Groups like the Palm Beach Research Group take a small grain of truth and blow it way out of proportion. They say that if you don't take action now you can lose thousands, but if you take action you can "gain" benefits. It's "true" for a person in a very specific situation, but for most individuals it's not. They "offer" this information as part of a "free" eBook. Note how I put this in quotes. It's only "free" because it's no additional charge. It's free when you sign up for their newsletter, which you will have to pay for. And when you actually read the analysis, you realize that it doesn't apply to you. If you complain, there's no "complaint" because you got that information for free. You're paying for this newsletter that they're sending you on a regular basis. It's unethical in my opinion.

But to reiterate, there's no increase in benefits. It's possible that someone (who has not yet filed for Social Security) can still increase the total amount that he/she receives in the long run, so that specific person can "increase" his/her benefits by employing this strategy. But it's completely irrelevant for someone who is already receiving benefits.

I know this is probably not what you wanted to hear, but it is the law. I hope that clears things up anyway. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for the time and effort that I spent on this answer unless and until you rate it positively (good or better). Thank you, ***** ***** luck to you!