Nevada Retirement Planners talk Social Security | NevadaAppeal.com

Nevada Retirement Planners talk Social Security

Brook Bentley
bbentley@nnbw.biz

The Baby Boomer generation has already begun to use Social Security benefits and there are many more Boomers on the cusp of eligibility. As they file for their Social Security benefits, they may find recent changes within the Social Security system that affect their benefits and make them complicated to understand.

Franklin Delano Roosevelt signed the Social Security Act in 1935 out of necessity due to numerous aging Americans struggling as the country was coming out of the Great Depression. The idea was financing would come from workers and employers and then be distributed to retirees.

This is the basic model it has followed since. In some sense, Social Security functions like a government-run retirement account. Throughout your working life a portion of your paycheck goes towards supporting Social Security, with the understanding when you retire other workers continue to have a portion of their paycheck do the same.

Nevada Retirement Planners (NRP) wants to help inform people who are approaching retirement age and who need to understand their Social Security benefits about the changes that could impact their Social Security filing and process.

These changes include the new rules that resulted from the passing of the Bipartisan Budget Act of 2015. These rules affect what is known as the Restricted Application; this application currently allows for spousal benefit filings as well as a process known as “file and suspend.” The Bipartisan Budget Act of 2015 means changes to both of these filing processes can be significant.

The filing strategy, known as the Restricted Application for spousal benefits, was introduced in 2000 by the Senior Citizens Freedom to Work Act and will be phased out over a four-year period with the exception of workers born before January 1, 1954, who will be grandfathered in.

Those born later than this date are included under what is termed “deemed filing.” It eliminates the option for filing what’s called a “restricted application.” Thus, the person seeking to file for Social Security benefits with a restricted application will be required to file for all their benefits when they file, rather than opting to take a lower amount of benefits.

In regards to the process known as “file and suspend,” the bill will still allow for a worker to file for benefits and suspend them but it will no longer function as an advanced filing strategy because the bill prevents dependents, such as a spouse, from receiving assistances based on a primary worker’s earning record if the primary worker has suspended his or her benefits through “file and suspend.”

There are other rules regarding filing that also are impacted under the Bipartisan Budget Act of 2015, such as those regarding divorce spousal benefits.

These rules mostly went into effect as soon as the bill was enacted last year, but there are some filings that can be done by May 1 that will allow a person to be grandfathered in under the old rules.

For more information and to learn about how this act could impact your Social Security benefits, the Northern Nevada Business Weekly is holding a live event with Nevada Retirement Planners at the Peppermill on March 29. You can also visit NRP’s Web site at http://www.nvretirementplanners.com.