Are you ready to start your Social Security benefits? Are you debating whether to start your own or your spousal benefit? If you find yourself in this situation, then this is the blog for you. Today we will be discussing your Social Security benefits, what’s considered deemed filing, and how that affects you.
In the history of Social Security, there were multiple options you could use to begin receiving your benefits either based on your own work history or your spouse’s. Thanks to the Bipartisan Budget Act of 2015, there were many changes to the laws about how you can file. When discussing anything related to Social Security you need to know the following:
- Your full retirement age (FRA) is defined by the Social Security Administration (SSA).
| If Your Year of Birth Is | Your Full Retirement Age Is |
|---|---|
| 1943-1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 or later | 67 |
DATA SOURCE: SOCIAL SECURITY ADMINISTRATION
2. Your retirement benefit will be reduced if you begin prior to your FRA
3. Your retirement benefit will be increased for each year you delay after your FRA.
The Act changed one of the most popular strategies called File and Suspend. If you had turned 2 before January 2, 2016, then you had the option to claim your benefit but then suspend the payment of benefits, therefore, allowing them to be delayed and receive the increases. All the while, you could be receiving your spousal benefits based on your spouse’s (or ex-spouse’s) earned income. This option is no longer in existence as a result of the Act.
Now, when you go to claim your Social Security benefit, whether that be your own or your spousal benefit, you are considered to be claiming both. This is called deemed filing. In other words, deemed filing means that when you file for either your retirement or your spouse’s benefit, you are required or “deemed” to file for the other benefit as well. The SSA states that “deemed filing applies at age 62 and extends to full retirement age and beyond. In addition, deemed filing may occur in any month after becoming entitled to retirement benefits.1”
There are 2 exceptions to this rule. Per the SSA website, those are as follows:
- Deemed filing applies to retirement benefits, not survivor’s benefits. If you are a widow or widower, you may start your survivor benefit independently of your retirement benefit.
- Deemed filing also does not apply if you receive spouse’s benefits and are entitled to disability, or if you are receiving spousal benefits because you are caring for the retired worker’s child.
Even though the File and Suspend strategy has been closed, there are still many important factors to discuss as it pertains to when you should file for your benefit and how that will affect your overall financial plan and future retirement income.