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Q&A: Are There Any Good Alternatives to Cushion the Blow of Lost Social Security for Married Couples?

Retirement Income Social Security

Question: 

Are there any good alternatives to cushion the blow of lost Social Security for married couples?

Larry's answer: 

Yeah, Congress snuck up on us with that...and then set a land speed record passing the legislation.

But to clarify, the only loss centers around the "File & Suspend" and corresponding "Restricted Application" strategies for folks at certain ages. People can still defer their Social Security for a larger benefit. And the Restricted Application for spousal benefits is still available provided the primary earner has filed and is "collecting" (not suspending).

I've blogged about the details here: "Say Buh-Bye to Creative Social Security Strategies."

As for alternatives, that depends on your particular situation, resources, retirement spending needs, assumed life expectancies, and so on. But to cushion the blow, you might consider some of these ideas:

  • Retire a bit later than previously planned or consider a "phased" retirement while continuing to work at least part-time.
  • Reduce planned spending if your retirement plan was dependent on those additional SS funds from strategies that will no longer be available.
  • If your retirement plan can sustain it, at Full Retirement Age go ahead with "File & Collect" (instead of suspend) and the "Restricted Application" for spousal benefits.
  • If your retirement plan can sustain it and you wish to defer Social Security benefits, once you retire consider drawing first from pre-tax retirement accounts (IRA 401k, 403b, so on) and then scale those distributions back once you claim Social Security.
  • Some combination of the above.

Be sure to run fresh retirement projections (which include the Social Security changes) to help guide in your decision. Feel free to reach out if I can be of any help.

Originally answered on WalletHub on November 22, 2015.