President Obama signed into law a bipartisan budget bill in October that, among other things, changes – for better and worse – Social Security and Medicare laws. Here’s a wrap-up.
File and Suspend: Currently, a married person, typically the higher wage earner in a couple who’s at least full retirement age could file for his or her own Social Security benefits and then immediately suspend those benefits while the spouse could file for spousal benefits. That option is ending for new filers starting May 1, 2016, so if you’re interested, now’s the time to apply. People already using this strategy will be grandfathered in until age 70.
Restricted Application: This is also being phased out. Currently, individuals eligible for both a spousal benefit based on their spouse’s work record and a retirement benefit based on his or her own work record could choose to elect only a spousal benefit at full retirement age, according to Social Security Timing. That would let them collect a higher benefit later on. Under the new law, however, only those born Jan. 1, 1954, or earlier can use this option. Anyone younger will just automatically get the larger of the two benefits, according to Social Security Timing.
Medicare Part B: Some 30% of Medicare beneficiaries were expecting a 52% increase in their Medicare Part B medical insurance premiums in 2016. Under the new law, those beneficiaries (an estimated 17 million Americans) will pay about $119 per month, instead of $159.30, for Part B. (Some 70% of Medicare beneficiaries will continue to pay the same premium in 2016 as they did in 2015, $104.90).
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