There is a major change to Social Security regulations in the proposed 2015 budget by President Obama, which, if enacted, would eliminate popular Social Security claiming strategies that have significantly increased the size of people’s benefits.
Although it does not mention the strategies by name, it does say it is aimed at “duplicative or excessive benefit payments through a series of targeted reforms.”
Currently, for each year past full retirement age (FRA) that you delay the start of your benefits, you increase your Social Security earnings by 8%.
This claiming option is completely legitimate, and it was written into the regulation to reward those who delay in taking their benefit. Married couples have combined this strategy with other legitimate claiming choices, such as “file and suspend” and file to restrict the scope of your benefit” to boost their joint benefits.
The Obama administration aims to put an end to these practices, suggesting that they are being abused by rich seniors who don’t need the money. There is no clarity whether the administration needs Congress’ approval or whether it can just order Social Security to make the change.
Kenneth G. Marks has been practicing personal injury law since he was admitted to the California Bar in 1981. www.KmarksLaw.com