Monthly Archives: January 2016

If you want to claim Social Security benefits soon, keep a date & a number in mind.

Age 62 AND 2016

If you want to claim Social Security benefits soon, keep a date & a number in mind. The date is April 30, 2016…………….. The number is 62

That date and that number have become very important, especially if you are about to retire. Why? Congress recently revised the Social Security benefit rules.

In October, Congress passed a new federal budget. In doing so, it shut down the file-and-suspend and restricted application claiming strategies for Social Security, which married couples used to try and maximize their combined retirement benefits.1

Broadly speaking, the point of both strategies was to generate spousal Social Security benefits for a couple while they suspended their own, individual benefits (thereby allowing those individual benefits to grow by roughly 8% per year from age 62-70 until claimed).1

After April 30, 2016, the door will shut on the file-and-suspend strategy. The strategy worked like this: when one spouse reached Social Security’s Full Retirement Age (66), that spouse claimed Social Security but then immediately suspended their retirement benefits. The other spouse could then claim a spousal benefit while their deferred, individual Social Security benefit grew 8% annually.2

You may still be able to use the file-and-suspend strategy before the door closes.

Are you married? Are you 66 or older right now, or will you be 66 years old by April 30, 2016? If your answer is “yes” to both those questions, then you and your spouse still have a chance to use the strategy.

That chance disappears forever on May 1 – and you may be taking a big risk if you wait until April to claim benefits, as the Social Security Administration may have a backlog of applications on its hands at that time.2

If you are still eligible to file-and-suspend and you miss the April 30 deadline, you could end up leaving anywhere from $10,000-60,000 in lifetime Social Security income on the table.1

One asterisk: you can still use the file-and-suspend strategy as an individual. You can file for your Social Security benefits and voluntarily suspend them, letting your deferred, individual Social Security benefit grow by about 8% a year until age 70.3

Why is the number 62 now so important? You will not be able to file a restricted application for only spousal benefits if you turn 62 in 2016 or later. In other words, the door is closing on the restricted application claiming strategy.1

That strategy worked as follows: between age 66 and age 70, one spouse would file a restricted application to claim spousal Social Security benefits while deferring their individual benefits until age 70. At 70, they switched from the spousal benefit to their own larger Social Security benefit.2

In 2016 and future years, spouses newly eligible for Social Security will be given a simple, irrevocable choice. They can take either their spousal benefit or their own benefit, whichever is larger. They will not be able to defer their own benefit until age 70 and then switch out of their spousal benefit at that time to their own, larger benefit.2

The good news? If you are 62 or older by the end of 2015, you can still file a restricted application for only spousal benefits. That could be a smart move if your spouse will be getting Social Security when you hit full retirement age (FRA) and you file for your spousal benefits on their earnings history.2

One other option is also going away. Under the new regulations, a Social Security beneficiary cannot file for benefits, suspend them for X years, and then retroactively request the suspended benefits as a lump sum. For example, if you file for Social Security at age 63, suspend benefits and then elect to receive your benefits at age 66, you will simply start getting the monthly Social Security income you deserve at age 66. No lump sum of deferred Social Security income will be waiting for you.2

If you are peeved by all this, you are not alone. You may have been counting on the file-and-suspend or restricted application strategies to arrange greater retirement income. Congress viewed them as loopholes that needed closing.

Does waiting to claim Social Security until age 66 or 67 still make sense? For many couples – particularly those in good health – it still does. While the sun is setting on the chance to receive some spousal benefits while you wait, the basic math of Social Security remains the same. The longer you wait to file for benefits, the larger your monthly individual benefits will be, up until age 70.

Sincerely, GregO

1 – [12/5/15}
2 - [12/4/15]
3 – [11/2/15]
Informational / 8923418923789[12379[`23874[9`3 GREG O / USA

Why estate planning is so important, and not just for the rich.

Who Needs Estate Planning?
Why estate planning is so important, and not just for the rich.


You have an estate. It doesn’t matter how limited (or unlimited) your means may be, and it doesn’t matter if you own a mansion or a motor home.

Rich or poor, when you die, you leave behind an estate. For some, this can mean real property, cash, an investment portfolio and more. For others, it could be as straightforward as the $10 bill in their wallet and the clothes on their back. Either way, what you leave behind when you die is considered to be your “estate”.

“But, I don’t need estate planning … do I?” Let’s think about that. If the estate is small, should you still plan? Well, even if you’re just leaving behind the $10 bill in your wallet, who will inherit it? Do you have a spouse? Children? Is it theirs? Should it go to just one of them, or be split between them? If you don’t decide, you could potentially be leaving behind a legacy of legal headaches to your survivors. This, quite simply, is what estate planning is all about – deciding how what you have now (money and assets) will be distributed after your lifetime.

Do you HAVE to create an estate plan? While it is absolutely possible to die without planning your estate, I wouldn’t say that it is advisable. If you don’t leave behind an estate plan, your family could face major legal issues and (possibly) bitter disputes. So in my opinion, everyone should do some form of estate planning. Your estate plan could include wills and trusts, life insurance, disability insurance, a living will, a pre- or post-nuptial agreement, long-term care insurance, power of attorney and more.

Why not just a will? Did you know that your heirs could encounter legal hassles … even if you have a will? Basically, a will tells the world what you’d like to have happen, but proper estate planning is what provides the tools to make those things happen. While your will may state who your beneficiaries are, those beneficiaries may still have to seek a court order to have assets transfer from your name to theirs, and in such a case, those assets won’t lawfully belong to them until the court procedure (known as probate) concludes. Estate planning can include items like properly prepared and funded trusts, which could help your heirs to avoid probate.

Where do you begin? I recommend that you speak with a qualified legal or financial professional – one with experience in estate planning. A qualified financial professional may be able to refer you to a good estate planning attorney and a qualified tax professional, and lead a team effort to assist you in drafting your legal documents.