The Bipartisan Budget Act of 2015 made significant changes to Social Security claiming options. Now, rather tahn a single set of rules applying to all applicants, there are three sets of rules that might apply, depending on age.

The first of these rules will be effective April 29. The potential impact on retirees could be tens of thousands of dollars over the course of a couple’s retirement.

The most significant change is the elimination of the “File and Suspend” strategy, in which one spouse files for benefits and immediately suspends them. This allows the other spouse – and possibly other beneficiaries – to claim benefits based on the first spouse’s earnings, while the earner’s benefit continues to accrue Delayed Retirement Credits. With the change, whenever a retiree suspends benefits, all benefits based on his or her record will be suspended as well. Retirees who are 66 by April 29 can take advantage of this strategy, but only if they apply before that date.

With the new law comes the elimination of the Restricted Application, which allows a spouse who has reached full retirement age to collect only spousal benefits (benefits based on the spouse’s work record), allowing their own benefit to accrue Delayed Retirement Credits. The new legislation eliminates this option by extending the “Deeming Rule,” which dictates that if an individual is eligible for his or her own benefit and a spousal benefit, he or she would only be paid a single benefit, the equivalent of the higher of the two.

Before the change, the Deeming Rule only applied when claiming benefits before full retirement age.  Under the new rule, deeming will apply to all claims up to age 70. This change applies to anyone under age 62 at the end of 2015. For those who were at least 62 years old by January 1, the Restricted Application option is still available.

Several other changes to Social Security claiming strategies were included in the Budget Act, but the elimination of the above strategies will have the most negative impact on retirement income.

For more information on how these rule changes impact your retirement benefits, contact a financial professional who knows the Social Security rules and how to apply them.

Nick Naseman is a local retirement advisor and President of Iron Mountain Financial. He is a Retirement Income Certified Professional®, a Certified Financial Educator®, and a member of the Consumer Advocate Financial Network and Senior Resource Council. Nick focuses on designing and implementing retirement income strategies with the goal of making retirees’ nest eggs last as long as possible. Contact Nick at 719-623-7433 or Nick@Iron-Mountain-Financial.com. For more information, visit Iron-Mountain-Financial.com.