Financial Engines’ Social Security Planner now supports changes to Social Security regulations enacted by the Bipartisan Budget Act of 2015.
The Bipartisan Budget Act of 2015 introduced changes to Social Security regulations that limit households’ ability to use some lesser-known Social Security claiming strategies. Financial Engines says these changes have been incorporated into the Social Security Planner to provide users with up-to-date guidance regarding benefit claiming strategies, to maximize their expected lifetime benefits and household income in retirement.
The most significant Social Security regulations changes apply to individuals who will not have reached the earliest eligible claiming age of 62 by the end of 2015. These individuals will no longer be able to file restricted applications to receive only their spousal benefits. Second, starting six months after the passage of the act, when an individual suspends benefits, the associated benefits of their spouse, ex-spouse and dependents will also be stopped.
“Despite these changes impacting Americans’ Social Security claiming decisions, the general rule that it pays to delay still applies for most Americans,” says Wei-Yin Hu, vice president of financial research at Financial Engines. “For every year participants defer claiming Social Security, they still receive a six to eight percent increase in lifetime benefits.”
Married couples, however, will have fewer claiming strategy options once the changes go into effect, Financial Engines notes. “Certain qualifying households still have an opportunity to capitalize on these valuable and often overlooked strategies,” says Hu. “Couples using these sunsetted approaches could gain an additional $100,000 or more in lifetime Social Security benefits, so taking advantage of them could be incredibly worthwhile, if you qualify.”