Social Security Changes Mean Greater Nest Egg Reliance By J.R. RobinsonSubmitted by Financial Planning Hawaii on November 9th, 2015
"If ever there were a sense of urgency in ensuring that your clients are able to get the most they are eligible for under Social Security, that time is now."
– Joe Elsasser, CFP, Founder-SocialSecurityTiming.com.
A few weeks ago, the financial planning community was in an uproar over the 50% increase in Medicare premiums that was slated to go into effect in 2016. The good news is that a deal hammered out between the Whitehouse and Congress will prevent a sharp Medicare premium increase for more than 15 million Americans [see article link] –
The bad news – and by “bad”, I mean “very bad” – is that in the course of negotiations with the White House over the 2016 Budget, both Congress approved sweeping changes to Social Security that dramatically alter popular claiming strategies for retirees and significantly reduce the lifetime benefit amount millions of Americans may expect to receive. The financial planning community is scrambling to come to grips with the ramifications of the new rules, which include the ultimate elimination of restricted applications and the “file and suspend” claiming strategy. The following three articles introduce the changes in greater detail.
New Social Security Rules to End Key Filing Strategies (Wall Street Journal)
Advisers rethink retirement plans amid Social Security (Investment News)
The long and short of the new rules is that millions of Americans who are approaching retirement may receive far less in social security retirement benefits over their lifetimes and will necessarily need to rely more on their own savings to maintain their standards of living in retirement.