Covisum Blog

When I spoke about Social Security planning at the NTSAA 403(b) Advisor Summit in Las Vegas, much of the discussion centered on the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) in Social Security. If you’re an advisor who works with teachers, police officers, firefighters, government employees or the spouses of those workers, you need to be aware of these provisions and how they affect your clients.

The 2016 budget makes sweeping changes to Social Security claiming rules for retirees surrounding the Restricted Application and the Voluntary Suspension. Changes to the Restricted Application

The proposed 2016 budget makes two highly significant changes to Social Security claiming rules. Section 831(a) eliminates the restricted application strategy by requiring that anyone who files for any benefit be “deemed” as though they are filing for all benefits for which they are eligible. Section 831(b) modifies voluntary suspension by requiring that any benefits for any auxiliary be stopped when the primary wage earner suspends his own benefit. Under prior rules, a voluntary suspension only stopped the checks of the person who suspended their benefits, while auxiliaries such as spouses and children could continue to collect their checks.

Every two years, we get a small dose of election campaign rhetoric regarding Social Security, and every four years, we get a big dose. Candidates claim their opponents’ plans to save Social Security will bankrupt grandma, rob children of their future, or worse. This year, New Jersey Gov. Chris Christie kicked off the tradition with a bold proposal to scale back Social Security benefits for some Americans. Christie, a potential presidential candidate, proposed means testing that would reduce the size of benefits for people earning more than $80,000 annually and phase them out completely for those earning $200,000 or more. He also wants to raise the full retirement age from 67 to 69 for people born in 1960 or later. When the rhetoric heats up, we inevitably get panicked calls from advisors asking for our prognostications on what will happen and how it will impact the strategies we help you identify. Our answer can be summed up this way: This is a big ship, and it doesn’t turn quickly.