Money Talk: Social Security rule changes may affect retirement strategy

Changes to Social Security have eliminated the option of getting a lump-sum payout if you suspended an application for benefits and later changed your mind. Only when you reached full retirement age did you have the option of filing a “restricted application” for spousal benefits only. People who are 62 and older before the end of this year will still be able to file a restricted application at 66 and get spousal benefits, but only if their partners are either receiving benefits or were able to “file and suspend” — to file an application and suspend it before May 1, 2016. The potential payouts from using these two techniques, which together were called the “claim now, claim more later” strategy, were so great that advisors typically recommended that people tap their retirement accounts early if that was the only way they could delay their Social Security applications long enough to benefit. Once you start receiving benefits, she’ll be able to file a restricted application for spousal benefits only and then switch to her own benefit at 70.