On October 27th we heard that the 2015 Bipartisan Budget Bill could include some major changes to Social Security and on November 2nd President Obama signed the deal to make it official. These changes show us just how quickly the laws can change and that we need to be there to educate our clients. I wanted to share what these changes are, the exceptions for these changes and how you can turn these changes into an opportunity.

The LifePro Social Security calculator helps you show your clients how they can maximize their Social Security benefits through their lifetime. About 85% of the suggested strategies tell the client to either file and suspend their benefits and/or file a restricted application, however, these are the two strategies that will no longer exist under the new rules. The "file and suspend" strategy allows a client to open their record for benefits but immediately suspend payments. The purpose was that the client's spouse could then begin spousal benefit while they continued to earn delayed retirement credits on their own record. The "restricted application" strategy allowed a spouse who was at their Full Retirement Age to collect only a spousal benefit while again they earn delayed retirement credits on their own record. Really these changes take away the opportunity for clients to receive additional spousal benefits for four years if a client's full retirement age is 66. For an example, if a client had a $2,500 primary insurance amount the spouse would be able to take $1,250 in benefits a month for four years which would be an additional $60,000 in benefits. This additional benefit will no longer be available.

There are some exceptions to these rule changes. For the file and suspend change anyone who has already claimed benefits with a file and suspend strategy or anyone who implements this strategy in the next 6 months can continue with this strategy. Also, anyone who took their benefits early and wants to suspend their benefit at Full Retirement Age can still do so to receive delayed retirement credits.  For the restricted application, the new rules only apply to clients who attain age 62 after 2015. From everything we have read this is how we interpret the new rules and we will continue to monitor the situation.

Here at LifePro we have 3 Social Security calculators:

1. Quick Social Security Calculator
2. Social Security Tax Calculator
3. Advanced Social Security Calculator

The first two will not be effected by the new changes while the third one will. We will be adding notes to this calculator that will help educate your clients on these changes and in the coming months we will make these changes to this calculator.

Although these changes do slightly simplify the Social Security system it is still confusing for clients and they will still need your help for guidance on when they should take their Social Security benefits. We see this as an opportunity for you to get in front of your clients that this may effect so that you can give them that value adds service. Anytime you can get in front of your clients and show them that value it's a benefit to you.  I challenge you to find 5 clients that you can call in the next week so you can update them on these Social Security changes and see if you can find the solution for them.

I have read over 20 articles on these changes and here is one of them for more detail:

Washington Post