There’s a lot to absorb in the 144-page budget deal with the White House that departing House Speaker John Boehner is trying to nudge through Congress on his way out the door.
To better prepare for the possibility of a year with a low or zero COLA in the future, here are a couple of things for you to reflect on in regards to your financial plan.
What is “file and suspend”?
The strategies under fire known as file-and-suspend and a restricted application for spousal benefits attracted interest in the wake of a 2000 law that allowed Social Security beneficiaries to voluntarily suspend their checks after they had applied for benefits.
Earlier in the book, Huckabee wrote it was “a dirty little secret” that Social Security was devised in a time when people had a short life expectancy and weren’t expected to live into their seventies. The much-maligned sequester’s not done for entirely, though; legislators are just skirting it for a couple years. Even if you were to take a smaller benefit by claiming earlier, your kids will still get half of your full retirement age amount. “And they stole it from you because now they know they can not pay these benefits, and Social Security is going to be insolvent in 7 to 8 years”. Without a 2016 cost-of-living adjustment (COLA) for Social Security benefits, about 70% of beneficiaries are held harmless from any increase in their Medicare Part B premiums, so the premiums will remain stable at $104.90 per month for most beneficiaries. Experts are now recommending waiting as the longer you wait to claim your benefits, the higher your monthly benefit will be. But for her to receive that extra $200, Tom would have to file first. For this strategy to work, the spouse must be at or over FRA. With it, Tom could earn the delayed-retirement credits and allow Beverly to file for the full spousal benefit.
It might sound simple, but not everyone thinks seniors should have access to “file and suspend“.
The Obama administration has also described a few of these filing strategies as “manipulative” and “aggressive”, arguing that high-income seniors use them to gain an unfair advantage.
Another useful benefit of the file-and-suspend strategy is that it can greatly enhance the opportunity to collect benefits retroactively. Still, Congress has it on the chopping block.
The Boehner/Obama budget deal tries to duct-tape this shortfall. And many of these changes will particularly hurt the middle class, women and families with disabled children.
Meanwhile, the wealthiest in our country and the corporations calling all the shots have gotten a free pass. And let’s be honest: privatizing Social Security has been on the Wall Street wish list for many years because they want to get their hands on our retirement income, and they’re not about to give up.
That’s especially true for women.
How reliant on Social Security will I be?
Social Security will no longer accept medical evidence submitted by an unlicensed or disciplined doctor or health care provider on behalf of a disability applicant. “My mother is on Medicare and Social Security“, Rubio said.
Because Social Security and Medicare require a steady stream of payments greater than or equal to what is paid out in benefits, it is unsustainable and should be phased out.