President Barack Obama’s proposed 2015 budget, released last week, could impact the way some retirees claim Social Security benefits.
As reported by InvestmentNews on Friday, a sentence more than halfway through the 214 page document reads that the budget proposes to eliminate strategies for claiming Social Security benefits that allow beneficiaries to maximize delayed retirement credits.
The longer one delays receipt of Social Security benefits, for example, the more the income grows. Someone claiming at 62, before the retirement age of 66, would receive 75 percent of their benefits; someone waiting until 66 would collect full benefits; and someone able to put off receiving benefits until 70 would see their income stream grow by 8 percent a year for the four years after 66, far greater than the return guaranteed by any investment.
There is also the “claim now and claim more later” strategy used by spouses, where the older spouse can delay receiving benefits until turning 70, receiving the higher income stream, while the younger spouse claims spousal benefits until reaching 70, at which point he or she claims their own enhanced income flow.