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New law phases out a Social Security option

I was happy to learn about the advantages of taking my spousal Social Security benefit at full retirement age and waiting until age 70 to collect my own Social Security benefit. But I’ve read that a new budget bill will eliminate the ability for spouses to claim this spousal benefit. Is this true?

The budget bill became law, effective Nov. 2. It doesn’t eliminate spousal Social Security benefits. But it does phase out the option you’re talking about, which lets a person who has reached full retirement age — i.e., 66 — apply only for a spousal benefit, and postpone taking his or her own benefit until age 70.

That option is called “filing a restricted Social Security application.”

Under the new law, people who were at least 62 years old on Dec. 31 this year will still be able to file a restricted application when they turn 66. But for younger people, that choice is now off the table. Regardless of their age when they file for Social Security, they will automatically be applying for all the benefits they’re eligible to receive. This means that anyone born after Dec. 31, 1953 who qualifies for both a spousal and a primary benefit will be applying for both, and receive an amount equal to the larger of the two. (Nobody has ever received his or her spousal benefit and primary benefit at the same time.)

The advantages of postponing Social Security haven’t changed. You’ll still receive an 8 percent annual credit for up to four years if you delay filing for your primary benefit after reaching your full retirement age. But if you were born after Dec. 31, 1953, you won’t be able to collect a spousal benefit in the meantime.

THE BOTTOM LINE Social Security rules are now less flexible for people born after 1953.

WEBSITES WITH MORE INFORMATION nwsdy.li/ChangeSocSec and nwsdy.li/BenefitEstimator

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