Legislation that closes loopholes in claiming Social Security benefits is good public policy, a professor at Boston College – Carroll School of Management argues in a Making Sen$e column for “PBS Newshour.”
Alicia H. Munnell is the Peter F. Drucker Professor of Management Sciences at Carroll and the director of the Center for Retirement Research at Boston College.
In the column, Munnell describes two of the loopholes being closed by the Bipartisan Budget Act of 2015:
“The ‘file and suspend’ strategy allows for a worker who reaches the full retirement age to file for and immediately suspend his or her benefits, while still allowing the spouse to receive a spousal benefit based on the worker’s earnings record. The worker is then free to continue working and receive delayed retirement credits, which increases not only his or her monthly benefit but also the spouse’s survivor’s benefit.”
“The ‘spouse then worker’ strategy allows a worker with relatively high earnings to begin claiming a benefit as a spouse for several years, as if he or she were economically dependent, while building up delayed retirement credits towards his or her own worker’s benefit later.”
Munell writes those loopholes run counter to the spirit of Social Security. She argues that the system should not be structured so that those who are “in the know” get a better deal.
The changes affecting the “file and suspend” loophole start taking effect six months from the legislation’s Nov. 2 signing date. The grandfathering period for the “spouse then worker” strategy is “much longer,” Munell writes.