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If you’ve been working with senior clients for quite some time, then you’ve hopefully heard about the “file and suspend” Social Security filing strategy.
Haven’t heard of it? Let’s recap it really quick: “file and suspend” was essentially a loophole in Social Security benefits collection. Before May of 2016, any married individual aged 66 could enroll in Social Security, but delay receiving their benefits for up to four years. The law allowed for their monthly benefits to grow larger for each month the individual delayed, allowing them to grow their benefits by 8% each year, totaling 32%. The “file and suspend” method enabled these married individuals to start receiving spousal benefits at full retirement while allowing their own retirement benefit to grow while delaying it.
This was a strategy used by over 100,000 senior couples, providing a very real opportunity for them to grow their retirement income and enjoy an easier retirement.
Closing a Loophole
These benefits could total as much as $60,000 for couples taking advantage of the “file and suspend” strategy. However, Congress has signed language into the 2016 budget bill that essentially removed this as a possibility for everyone. Calling it a ‘loophole,’ Congress has closed this strategy as an option on the rationale that nobody should be able to receive one type of benefit while at the same time earning a bonus for delaying the other benefit.
Analyzing Unconventional Options
With only 57% of baby boomers estimated to be able to support themselves during retirement, we’re looking at a current crisis in the retirement outlook for a large portion of our seniors approaching retirement. It’s becoming more and more practical and important to analyze all possible financial options that seniors have to grow their retirement funds and manage income. This is why we’re seeing more and more seniors taking advantage of life settlements in order to better prepare themselves for the costs of retirement in their future.
Life settlements provide a very real and legal opportunity to seniors who no longer need or want their life insurance policies and are looking for ways to increase their available retirement funds. We understand that you might not be completely aware of life settlements and how they work, and that’s okay! We’re experts in the life settlement business and would be happy to walk you and your client through everything.
Check out our Advisor Resource Page to learn more about life settlements and don’t hesitate to give us a call to get started on one today!