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Understanding Social Security and the Bipartisan Budget Act of 2015

Brent Armstrong, CFP®, Wealth Management Advisor, Partner | Erik Nelson, Wealth Management Associate | March 20, 2016


The Bipartisan Budget act was passed in and signed into law at the end of 2015, with several key changes:

File & Suspend:  This is a well-publicized strategy where a person (usually the higher earner) files for benefits at full retirement age (usually age 66), and immediately suspends receiving those benefits until a later date (usually age 70).  This allows their spouse to begin collecting spousal benefits on their record while the higher earning worker’s benefit increases at 8% per year.


Restricted Application:  This allows a person, who has reached full retirement age, to file benefits restricted to their spouse’s record, while their own benefit increases at 8% per year.  The person could then switch to their own record at age 70 when the maximum benefit has accrued.  This is also important for divorcees who would be eligible for benefits on their ex-spouse’s record.

  • What has changed?
    • They are eliminating this strategy for anyone born on or after January 2nd, 1954
      • Those who have already filed for this benefit are unaffected.
    • If the spouse suspends their benefits, their spouse will not be able to receive any benefits during that suspension.
  • Who is eligible?
    • Any spouse married for at least one year and at full retirement age.
    • Any ex-spouse married for at least 10 years and hasn’t remarried (the wage-earning spouse can remarry)
  • What should I do if I’m eligible?
    • Check with your advisor to see if this affects your retirement planning.  You may need to consider the risk of a spouse filing, and then deciding they made a mistake, and suspend.  Their suspension may also suspend the benefits you are receiving on their record.  Other implications like Medicare payments may also come into play.
      • There is an exception for ex-spouses; if your ex-spouse suspends benefits, it will not affect the benefits you are receiving or your ability to file on their record.
  • Additional information here:


If you are younger than 62 and were expecting to use one or both of these strategies in your retirement, there are other strategies worth considering as you approach retirement.  Consider discussing this topic with your advisor in light of these changes.

** The information provided should not be interpreted as a recommendation, no aspects of your individual financial situation were considered. Always consult a financial professional before implementing any strategies derived from the information above.