Our country’s seniors have relied on Social Security for post-retirement financial security for the past 80 years. While the program has been reliable and effective for a long time, changes to the program have recently been approved that will begin next year. These changes eliminate what have been referred to as “unintended loopholes” that some married couples and families have used in order to maximize their benefits. In order to help you understand these changes, the South Carolina attorneys at George Sink, P.A. Injury Lawyers have compiled a list of what will and will not change about the Social Security program beginning in 2016.
The approved changes include the following:
- File and Suspend. The popular “file and suspend” strategy, used by many to maximize benefits, will no longer be available beginning in May. Although you will still have the option to suspend if you choose, your spouse and children will also be forced to suspend family benefits as well.
- Annual Increases. The amount of earnings required for a quarter of coverage will rise to $1,260 from $1,220, and the earnings threshold constituting substantial gainful activity for disabled beneficiaries (excluding the blind), also rose to $1,130 from $1,090. The formula for calculating family benefits will also change, limiting the amount of benefits a family can collect based on one person’s working history.
- Restricted Applications. Restricted applications will no longer be available for those reaching early retirement age. What this means is that a person can no longer choose to take only spousal benefits until reaching full retirement (age 70) in order to allow their own benefits to increase.
You should also be aware of what is not changing in 2016:
- Current recipients will still receive the same amount of benefits, and several threshold amounts will stay the same. For example, the wage base on which the government collects Social Security taxes will stay at $118,500, and the earned income limits for those who opt for early benefits will remain at $15,720. For those who reach full retirement age during 2016, the income limit is $41,880.
- Married individuals are still eligible to claim payments of up to half of their spouse’s benefit.
- Widows and widowers can still inherit their spouse’s benefit payment when it is higher than their own.
- People will still be able to increase the amount of benefits they can receive by delaying claiming them until they reach the age of 70.
Read more about these changes online via our source U.S. News & World Report.