Legal Blog

The Weekly Scenario: “File and Suspend” Strategy

Question: Has the “file and suspend” strategy that many people were able to take advantage of as they filed for their social security benefits been eliminated? Answer: Yes, the Bipartisan Budget Act of 2015 made a number of changes to social security, including the elimination of the so-called ‘file and suspend’ strategy. The file and suspend strategy permitted people who had reached their full retirement age to file for their social security benefits, but then request that such benefit not be paid to them. This allowed the individual to continue to earn delayed credits each year. Once the individual filed for his own benefit, it permitted a spouse for example, to claim a benefit based on the individual’s earnings record. If the individual changed his mind about waiting for a later date to receive social security benefits, the file and suspend strategy permitted a lump sum payment of the benefits that would have been paid (retroactive from the application date). As a result of the changes in the law, the window in which individuals may still be able to use this strategy is closing. In fact, the file and suspend strategy is being eliminated effective for suspension requests after May 2016. Comment: Those fortunate individuals who are still within this 6 month window will be grandfathered under the old rules.

ABOUT STEVE SHANE

Steve Shane Head Shot for webSteve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.

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