Social Security Filing Alert: Sometimes “No” just isn’t good enough

Contributed by: Timothy Wyman, CFP®, JD Tim Wyman

I recently had the opportunity to work with a long time client to maneuver the new Social Security filing rules; and if they would have taken the first “no” answer from the local SSA office the results would not have been good, to say the least.  As we have shared in the past, there have been significant changes to some of the Social Security filing rules, and specifically to the “file & suspend” strategy that we have worked hard to incorporate into many clients’ financial plans. Check out this blog by Nick Defenthaler, CFP®, for more information.

The most egregious part of this recent experience is that our client went to the SSA office with a copy of instructions specifically outlining “what” and “why,” and they still were turned away.

Here's part of the story:

Timothy Wyman, an adviser in Southfield, Mich., described a similar situation. His clients, a 67-year-old husband and 64-year-old wife, wanted to file and suspend the husband's benefits before April 30 to trigger spousal benefits for his wife. The wife plans to claim spousal benefits only when she turns 66.

The claims representative told the couple the husband only needed to file and suspend if the wife was planning on claiming her benefit now. Otherwise, they had nothing to lose by waiting.

Wrong! They would have a lot to lose. Miss the deadline and this couple would forfeit the opportunity to trigger benefits for the wife while his own benefit continues to grow until it is worth the maximum amount at age 70. It's an excellent strategy for married couples since it will also create a maximum survivor benefit for whichever spouse is left behind.

Anyone who is full retirement age has the right to request to suspend his or her retirement benefits that can trigger benefits for a spouse. The spouse does not have to be full retirement age at that time. -Mary Beth Franklin, Contributing Editor at InvestmentNews

Fortunately, our client knew better than to accept the “no” and emailed over the weekend for additional clarification. In the end, our client filed online and has preserved their right and benefit of filing and suspending. Please feel free to reach out if we can help you maneuver and maximize your Social Security benefits.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Timothy Wyman and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete.