For the first time in its history, changes being made to Social Security law will actually eliminate benefits currently being received by spouses, divorced spouses or children on the work record of a spouse, ex-spouse or parent who has taken advantage of the long used File and Suspend strategy. Those Social Security benefits will only continue when the worker restarts his/her retirement benefit.
This one change alone will cost millions of households tens of thousands of dollars by forcing those who have suspended their benefits in order to collect higher benefits at age 70 to restart their benefits at permanently lower levels. Most will have to do this in order to maintain their family’s living standards.
With more households needing to take their retirement benefits earlier a domino effect sets in which further hurts these families. They now lose most or all of their spousal benefits. The reason for this is that retirement benefits typically exceed spousal benefits and you can’t get both when forced to take both at once. The ability to collect a full divorced spousal benefit between full retirement age and age 70 will also be wiped out.
Life is also going to change for married women and those who are divorced who were married at least 10 years and who earn much less than their husbands or ex-husbands. They are now forced to take their own retirement benefit instead of waiting until 70 to collect. If they are forced to take their retirement benefit at full retirement age and if their spousal benefit exceeds their retirement benefit, they will end up getting absolutely nothing in return for each and every penny of taxes they paid to Social Security over their entire working lives.