Boston University economist Laurence Kotlikoff writes a regular column answering questions about your Social Security benefits.
I’ve written about this before and must do so again as Social Security has dragged its feet to issue any formal clarification on the issue. The agency left this issue unresolved, only 16 days from the April 29 deadline.
Some 1.2 million people will turn 66 between April 30 and August 31 of this year. My understanding on first reading the new Social Security law, which passed in November, was that if you turned 66 during this period (or thereafter) you could still a) file for your retirement benefit and suspend its collection (since the new law does not preclude anyone doing that on an ongoing basis), but you could not b) provide anyone benefits on your work record while your retirement benefit remained in suspension, c) collect benefits on anyone else’s work record while your benefit was in suspension and d) could not change your mind down the road and request all suspended benefits be paid in a lump sum.
Avram Sacks and some other private-sector attorneys who help people with their Social Security problems looked at the November law and reached a different conclusion. In their view, the new law permits someone who turns 66 to still do b, c and d through Aug. 31, 2016, provided they file and suspend prospectively by April 29 and turn 66 no later than four months after they prospectively filed and suspended. (The four months is based on Social Security’s standard practice of taking retirement benefit applications up to four months before the date of entitlement.) Hence, someone turning 66 on Aug. 31 would need to file and suspend precisely on April 29. Someone turning 66 on Aug. 30 would need to file and suspend on April 28 or April 29, etc.
Read more: PBS
Laurence Kotlikoff’s state-of-the-art retirement software is available here, for free, in its “basic” version. His new book, “Get What’s Yours—the Secrets to Maxing Out Your Social Security Benefits,” (co-authored with Paul Solman and Making Sen$e Medicare columnist Phil Moeller) was published in February by Simon & Schuster. Find a complete list of Kotlikoff’s columns here.