Last month President Obama signed a budget bill that includes changes for both Social Security and Medicare laws. The following is a short summary of the changes you can expect to see in the New Year:
- File and suspend is ending on May 1, 2016
What does this mean? A married individual can no longer file for his or own Social Security benefits and then immediately suspend those benefits while his/her spouse files for spousal benefits. This was a popular strategy because it allowed the individual’s benefits to grow 8% per year, while the couple still received a social security check under spousal benefits. For those already using this strategy, you will be grandfathered in until age 70.
- Restricted applications will no longer exist
What does this mean? Rather than having the option of collecting your own retirement benefit or only spousal benefit at full retirement age, individual’s will automatically receive the larger of the two. Currently, many individual’s opted to receive spousal benefits at retirement age and to save their own benefit to be collected later on. Only those born January 1, 1954 will be eligible for this option moving forward.
- There are changes in premiums and deductibles for Medicare Part B beneficiaries
What does this mean? An estimated $17 million Americans will pay about $119 per month, but about 70% will continue to pay $104.90 as they were in 2015. The annual deductible will also increase by 15% for all beneficiaries, totaling about $166.
USA Today also published an infographic that explains the Medicare Part B premiums for 2016