Important Guidelines for Claiming Social Security Benefits

If you are receiving Social Security benefits or planning to claim benefits in the near future, you should be
aware of the following guidelines for claiming strategies, which were enacted as part of the Bipartisan Budget Act of 2015.

1. If you were born on January 1, 1954, or earlier, you cannot leverage spousal benefits using a file and suspend strategy but will have restricted application strategies available. This means you are permitted to claim spousal benefits only at your full retirement age, assuming your spouse is already collecting benefits. This allows you to claim half of your spouse’s full retirement age benefit amount from full retirement age to age 70 then switch to your own retirement benefit with delayed retirement credits.

Note: Divorced spouses who qualify (born before January 1, 1954, were married for ten years, divorced two years, and are currently not married or waited until after age 60 to remarry (age 50 if disabled)) can file a restricted application for ex-spousal benefits at their full retirement age if their former spouse is at least 62 years old. Their former spouse does not have to be claiming benefits in order to file a restricted application for ex-spousal benefits.

2. If you did not reach age 62 by January 1, 2016, you cannot leverage spousal benefits using file and suspend or restricted application claiming strategies. Anyone who was younger than age 62 at the end of 2015 is subject to the deeming rules. This means that if you are eligible for a retirement benefit on your own work record and a spousal benefit, you will be forced to file for both at the same time and only get paid the higher of the two benefits.

3. There are two claiming strategies for surviving spouses. You are permitted to initially claim either: (a) a benefit on your own work record or (b) a benefit on your deceased spouse’s work record (the survivor benefit). Regardless of which benefit is claimed first, you have the ability to switch to the other (larger benefit) at a later date.

4. You can suspend your benefits if you claim early and then change your mind. If you claim prior to age 70, you can suspend benefits any time after your full retirement age and allow your benefit to earn delayed retirement credits until age 70. However, any other benefits being paid from your work record will also be suspended until you start collecting benefits again.

5. Divorced spouses are not affected by the file and suspend guidelines. If you are divorced and you are collecting an ex-spouse benefit from your ex-spouse’s work record and your ex-spouse suspends his or her own work record benefit, then you can continue to collect ex-spouse benefits.

Social Security remains an important and complex part of most retirement plans. Through Stifel’s Wealth Planning Department, your Stifel Financial Advisor can assist you by providing reports that outline different claiming strategies and answering any questions you may have.