Confusion reigns for some financial advisors and consumers alike when it comes to Social Security claiming strategies, according to two experts in the field.

The 2015 federal budget act eliminated what is known as ‘file and suspend’ for Social Security benefits, but it did not eliminate the ability to suspend benefits. Those are two separate strategies. As the two experts say: We told you it was confusing.

Dr. William Reichenstein and William Meyer have spent years trying to sort out the hundreds of rules that apply to Social Security so they can help advisors help their clients choose the best claiming strategy.

Reichenstein is the Pat and Thomas R. Powers professor of investments at Baylor University. He also is head of research at Social Security Solutions Inc., which develops software (www.ssanalyzer.com) for financial advisors to help clients decide when to claim Social Security benefits and is head of research at the software firm, Retiree Income Inc.

Meyer is CEO of Social Security Solutions Inc. and Retiree Income Inc. Retiree Income is the developer of Income Solver (www.incomesolver.com), software that provides advice on how taxpayers can maximize the longevity of their financial portfolio through tax-efficient retirement withdrawals.

Both men say the recent changes in Social Security, which eliminated two options –- file and suspend and restricted application –- that helped couples get more in benefits, made claiming strategies more complicated, rather than less. “There is confusion over the term suspend,” says Reichenstein.

Many people still file for Social Security too early before full retirement age or at full retirement age, which for most people now is 66 but is increasing to 67. When that happens, and they realize they should have waited to allow their benefits to increase at 8 percent a year until they are age 70, they can file for a suspension of benefits or a ‘redo,’ as Reichenstein and Meyer call it. A person also may want to change when they begin taking benefits because of a change in circumstances.

Financial planners usually know a client has the option to change his mind during the first 12 months after claiming benefits, pay back the benefits that have been received, and start over. The benefit amount continues to grow until a new claim is filed.

“But there are two other ‘redo’ strategies that planners may not be aware of,” Reichenstein says. One is the ability to suspend retirement benefits at or after full retirement age in order to earn delayed retirement credits, and then to reinstate suspended benefits at a later date. Social Security benefits grow at about 8 percent a year from age 62 until 70, as long as the benefits are not taken.

A person who began taking benefits at 62 but then realized she likely would live a long life and wanted to maximize benefits over a lifetime, can suspend benefits at 66 and let the benefit amount grow until she is 70. She does not have to repay the benefits she has already received. If she lives to age 95 she could receive tens of thousands more in benefits by waiting until she is 70 to start collecting.

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