Social Security is the blood that runs in the veins of this country and the grease that makes the American machine function. The program is about to go through a vast change. Monday, Congress passed a bill marking some major changes in how Social Security benefits are reaped by the citizens of this country. No part of this process was made public in any way. And understandably so, because a majority of Americans would not have liked it.
The brick that took the biggest hit was the file-and-suspend section of the Senior Citizens' Freedom to Work Act of 2000. People using the "file-and-suspend" strategy were able to file for their Social Security benefits at the retirement age, but start receiving payouts at a later stage in life. This was a safe move for couples sure of longevity since their expected benefits got raised by an average 8 percent every year, allowing them to receive more per month if they reaped their benefits later rather than sooner.
This used to give an edge to married couples, or people who had children with disabilities. They could file for spousal or disability benefits at retirement age, and start receiving their own individual social security benefits at a later age. Congress passed the aforementioned bill on the pretense that wealthy couples were exploiting this asset and ended up getting $50,000 to $60,000 more than their middle class counterparts. What they ended up doing, though, is making life more difficult for spouses and parents of disabled kids, leading them to lose the ability to file-and-suspend and receive only one of the spousal or individual benefits.
After an article on the subject by Lawrence Kotlikoff caught the media and the public’s attention, President Obama signed off on removing the flaw and allowing seniors to file for spousal or disability benefits without compromising their individual benefits. This did take care of some problems but the fact remains that the "file-and-suspend" strategy will disappear about 180 days after the bill became law.
The bill in itself clearly appears to be passed hastily and was conveniently never discussed with the public. Its daring new move is going to be a major inconvenience to the people planning their Social Security agendas for months, even years. While the passage of the next six months allows people to squeeze out whatever juice they can from the "file-and-suspend" strategy, the bill will definitely destroy the expectations of citizens who relied on this tactic while planning their retirement. Anyone turning 62 even a day after six months from now will not be able to take advantage of this claim.
It is unfair, and borderline abusive, for Congress to be ignorant about the concerns of seniors.