Annuity Guys®

Annuity Rates, Features & Ratings: America's trusted annuity resource. Compare best options for hybrid, index, fixed, variable & immediate annuity quotes.


Helping You Create Great Results Your Retirement Deserves!



(217)753-1515
  • Home
  • About Us
    • About Us
    • Contact Us
    • Site Terms & Disclosure
    • Privacy Policy
  • FAQs
    • Most Frequently Asked Annuity Questions
  • All Annuity Guys Videos
  • Annuity Types
    • Best Annuity Reviews
    • Market Free™ Annuities
    • Choosing an Annuity
    • Deferred Annuities
    • Hybrid Annuity Choices
      • Hybrid Annuity Pros&Cons
      • Hybrid Income Riders
      • Hybrid Annuity Guarantees & Strategies
    • Fixed Annuity Choices
      • Fixed Annuity Performance
      • Better Fixed Annuities
      • Fixed Deferred Annuities
      • Fixed Rate Annuities
      • Fixed Annuity Alternatives
      • Fixed Annuity Pros & Cons
      • Fixed Annuity Negatives
    • Index Annuity Choices
      • Fixed Index Annuity Features
      • Fixed Index Annuity Performance
      • Better Fixed Index Annuities
      • Fixed Index Annuity Alternatives
      • Fixed Index Annuity Pros & Cons
      • Fixed Index Annuity History
      • Fixed Index Annuity Negatives
    • Immediate Annuities
      • Immediate Variable Annuity
      • Immediate Fixed Annuities
    • Variable Annuities
      • Variable Annuity Features
      • Better Variable Annuities
      • Variable Annuities Disadvantages
      • Variable Annuity Alternatives
      • Variable Annuity Negatives
      • Variable Annuity Performance
    • Pre-Issued Annuities™
      • Hybrid Annuities versus Pre-Issued Annuities ™
    • Annuity Glossary
  • Articles
    • How Do MarketFree™ Annuities Work?
    • Are Annuities Safe?
    • Living Benefits
    • FIA Performance
    • Beware of FIAs?
    • Annuities & Retirement
    • Annuities & Estate Tax
    • Rollovers & Annuities
    • Annuities & Tax
    • Charity & Annuities
    • The Lost Decade
    • Best Annuity Videos
    • Social Security Benefits
  • Calculators
    • Retirement Planning Calculator — Basic
    • Retirement Shortfall Calculator — Basic
    • Immediate Annuity Calculator & Quotes
    • Fixed Index Annuity Calculator & Fixed Annuity Calculator
    • Variable Annuity Calculator & Hybrid Annuity Calculator
  • Blog
    • Annuity Guys® Weekly Annuity Video Blogs
  • Get Annuity Guys Help
    • Request Annuity Guys’ Planning Help Today
You are here: Home / Annuity Commentary / New Social Security Cuts are Effective NOW

New Social Security Cuts are Effective NOW

October 31, 2015 By Annuity Guys®

Last week, we had no idea that congress and the president would act so quickly on such an important issue!

Social Security changes: How will they impact your retirement plan?

This new budget bill will significantly impact the retirement plans of many individuals nearing or in retirement. Beginning in 2016, the bill would stop the benefits of…[continued below video]

Video: The Annuity Guys, Eric and Dick examine why this change to Social Security could be debilitating to so many retirees.

Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. During these segments, Dick and Eric are referring to Fixed Annuities unless otherwise specified.

Video: In case you missed last weeks video where Dick and Eric discussed the proposed changes to Social Security.

[continued]…spouses, divorced spouses or children on the work record of a spouse, ex-spouse or parent who has suspended his or her Social Security benefit with the plan of restarting their benefit later. This strategy is often referred to as the “file and suspend” strategy. However, these recent changes eliminate the said strategy effective May 2016 for all future retirees.

If you have not planned to use “file and suspend” or implemented this Social Security  strategy, you might just be saying “so what?” But as financial planners who pride themselves in helping clients optimize their retirement income, congress has just undone tens of thousands of optimized retirement plans across this nation, especially for those who do not reach full retirement age by May of 2016. They will not be grandfathered in and are directly affected in an adverse way by these changes. What these Social Security changes effectively do is to possibly cause couples to file for their own benefits earlier than they would have under the old rules in order to meet their retirement spending needs. For many, this loss can be a significant portion of their total retirement income.

So, in order to protect retirement lifestyles,  many couples will have to file for each of their Social Security income benefits simultaneously and earlier than planned. By filing earlier, they are losing out on the compounding growth available to individuals who delay taking Social Security until as late as 70. One major impact this will have is on the additional compounding effect provided by the cost of living adjustments (COLA); that under the old rules, Social Security payments could have been deferred longer by one of the spouses to lessen the impact of inflation by creating a larger benefit base for (COLA) income benefiting both spouses.

For many Americans, Social Security is a cornerstone of their retirement income plan. It is unfortunate that with the raise of hands, congress has undone the retirement benefits promised to so many American families.

Updated related article by Michael Kitces from Wednesday, November 4th.

Navigating The Effective Date Deadlines For The New File-And-Suspend And Restricted Application Rules

With last week’s “surprise” legislation that revealed Congress is killing the File-and-Suspend and Restricted Application claiming strategies for maximizing Social Security benefits, even those who weren’t previously aware of the strategies are now wondering whether it’s something to take advantage of before the new rules go into effect.

Fortunately, though, the new rules do not kick in immediately. Those who are already receiving benefits are not impacted at all. And those who are full retirement age – or will reach it in the next 6 months – will still have the opportunity to file-and-suspend before the crackdown takes effect after April 29, 2016. Furthermore, anyone who was born in 1953 or earlier (or January 1st of 1954) will still be able to do a Restricted Application for spousal (or divorced ex-spouse) benefits, even if the filing doesn’t occur until years from now.

Nonetheless, the next 6 months do mark an important transition period that merits a close look at Social Security claiming strategies, for the brief time window that all of the tools remain on the table, whether it’s an individual filing and suspending for a potential lump sum reinstatement in the future, a couple claiming spousal benefits, or a family claiming dependent or disabled child benefits while delaying individual retirement benefits until age 70. And for those “lucky” enough to be born in 1953 or earlier, only a few years remain to consider a Restricted Application, before that deadline ends, too!

The Near-Term Expiration Of The File and Suspend Strategy For Married Couples
How File-And-Suspend Used To Work
The original version of File-And-Suspend allowed someone, upon reaching full retirement age, to file for Social Security retirement benefits, and then immediately suspend them. The fact that benefits had been filed for meant a spouse became eligible for spousal benefits (as spousal benefits cannot be claimed until the primary worker also files for benefits). However, the fact that benefits of the primary worker were subsequently suspended – and therefore were not actually received – meant that the original filer could still earn delayed retirement credit increases of 8%/year for waiting.

Example 1. John and Mary are both age 66, and have been married for 40 years, in a household where John was the primary breadwinner and Mary never worked outside the household. John is eligible for a retirement benefit of $2,000/month at his full retirement age, and Mary at her full retirement age will have no retirement benefit of her own, but will be eligible for a spousal benefit of $1,000/month, equal to 50% of John’s full benefit.

John wants to delay his benefits until age 70, increasing his benefit by 4 years x 8%/year of delayed retirement credits to $2,640/year (plus subsequent cost-of-living adjustments). Doing so not only boosts his own benefit, but increases the size of John’s survivor benefit that would be payable to Mary if John dies first.

However, waiting until John turns 70 means that Mary won’t receive any of her $1,000/month spousal benefits until then either, since Mary cannot get spousal benefits until John actually files for his own. And since there are no delayed retirement credits for spousal benefits, the extra 4 years of waiting just means Mary permanently loses those 4 years of $1,000/month benefits with no benefit in return!

To resolve this issue, John would File-and-Suspend upon becoming eligible at his full retirement age of 66. By doing so, Mary becomes eligible to claim her own $1,000/month spousal benefit (which she can receive in full, since she too is age 66), accumulating 4 years’ worth of spousal benefits she otherwise wouldn’t have received. (If Mary had been younger, she could have also claimed, but her spousal benefits would be reduced for starting early.) And John still gets the 8%/year delayed retirement credit increases for delaying his own benefits until age 70.

The fundamental point – with File-and-Suspend, John could allow Mary to get her spousal benefits, while still delaying his own benefits to earn the 8%/year delayed retirement credits.

How File-And-Suspend Will Work Now
Under the new rules in Section 831 of the Bipartisan Budget Act of 2015, when John suspends his benefits, he will suspend not only his own benefits, but any/all benefits payable to other individuals based on his earnings record. And since Mary’s spousal benefits are 50% of John’s benefits – and therefore are based on his earnings – then the entire File-and-Suspend strategy is effectively dead.

Now, if John were to file-and-suspend, he will suspend his benefits and Mary’s benefits, so no one gets any benefits. Which means if John wants to delay his benefits to earn delayed retirement credits, Mary will have to wait on claiming her spousal benefits, too. [continue reading about the changes at kitces.com]

Five Retirement & Annuity Calculators

Best Advanced Retirement Income Calculator - Free
  • Advanced Retirement Annuity Income Calculator
  • Advanced Financial Planning
    Retirement Income Calculator
    Save Reports & Planning Docs!
  • This powerful calculator doesn't guarantee accuracy or any future results. You should use a licensed financial planner to confirm all of your calculations.
    Instant Access - Confidential - Easy Opt-Out
  • This field is for validation purposes and should be left unchanged.


[embedit snippet=”faq-short-version”]
819
SHARES
ShareTweetGoogleLinkedinPinterestSkypeStumbleuponTumblrDeliciousDiggRedditMail

Filed Under: Annuity Commentary, Annuity Guys Blog, Annuity Guys Video, Retirement, Social Security Tagged With: Annuities And Retirement, Annuity, retirement, Social Security

About Annuity Guys®

Annuity Guys®, Dick & Eric, enjoy entertaining you with their off-beat sense of humor, lighthearted sarcasm, and no shortage of expertise on annuities as they discuss today's retirement challenges. Got annuity questions... they've got annuity answers!

 

Empowering Annuity Reference Book

 
DOWN-LOAD NOW - FREE!
  • Annuity Guys Reference Book - 250 pages of Annuity Facts

  • "The New Retirement"
    Annuity Reference Book 
    Free Instant Download
  • Confidential - Easy Opt Out
  • This field is for validation purposes and should be left unchanged.

 

  • How Do Index Annuities Pay Higher Interest?

    How Do Index Annuities Pay Higher Interest?

    Okay, what’s the catch? How is it possible that a fixed index annuity (FIA) can eliminate market risk and earn higher interest than standard fixed annuities …Read More »
  • Are 8 Percent Annuity Returns in 2025 Too Good to be True?

    Are 8 Percent Annuity Returns in 2025 Too Good to be True?

    Annuity Salesman asks:  “How would you like an eight percent compounded return? -Guaranteed!” Misled customer replies, “Where do I sign-up?”Is …Read More »
  • Hybrid Annuity Sales Hit All Time Highs! Do You Know Why?

    Hybrid Annuity Sales Hit All Time Highs! Do You Know Why?

    Record numbers of retirees and savers are flocking to fixed and fixed index annuities – why?For many baby boomers , the great …Read More »

Revealing Fun Video: Fiduciary Advisors Vs. Annuity Salesmen
MUST KNOW FACTS 90% of
ANNUITY ADVISORS AVOID TELLING!
  • *FIDUCIARY RETIREMENT REVIEWS
    Second Opinions Improve Retirements
     
    "For Your Retirement's Success"
     Choose a *Fiduciary Advisor who gives you Full Disclosure of Cost & Selection.
     
    Material Fact 1:
      About 90% of advisors ARE NOT REQUIRED by law to do what is best for their clients!
     
    Material Fact 2:
     Fiduciary Advisors ARE REQUIRED by law to do what's best for their clients! 
     
      Hence, clients of a fiduciary can know that their advisor chose the highest legal standard required by law to work strictly for their highest good.
     
     We estimate Fiduciaries are less than 10% of total U.S. financial service providers. Fiduciaries are held to the highest client legal standard of financial planning and investment advice.
     
     The other 90% are sales oriented advisors, brokers, bank reps, registered reps. & insurance agents, selling products on a much lower suitability legal standard, not necessarily what's best for their client!
     
       Fiduciaries also must disclose conflicts of interest that could potentially bias their advice, such as; selling products that pay them higher commissions having higher fees or costs, and their lack of investment product access limiting their client's opportunities, to name a few.
     
    Choosing your advisor can have
    "The Largest Single Impact on
    Your Retirement's Success or Failure"


  • IRA / 401k to Annuity Rollover Concerns

    IRA / 401k to Annuity Rollover Concerns

    Many of the concerns people have with moving an IRA or 401k into annuities revolve around misconceptions with how the IRS treats …Read More »
  • Choosing a Fixed Annuity

    Choosing a Fixed Annuity

    If you are having trouble sleeping, you could count sheep or think about fixed annuities.Solid, unexciting, stodgy and downright boring …Read More »
  • Reduce Your Concern of Outliving Retirement Dollars!

    Reduce Your Concern of Outliving Retirement Dollars!

    Have you ever made a trip to the grocery store where you picked up a few items, walked up to …Read More »
  • Why You Should Ladder Annuities…

    Why You Should Ladder Annuities…

    When your financial advisor starts to talk to you about laddering, realize that they are talking to you about using …Read More »
  • How to Get Rid of a Bad Annuity

    How to Get Rid of a Bad Annuity

    Do you think you made a bad decision on an annuity purchase in the past? Do you think you’re stuck due …Read More »
  • Millions of Pensions Dumped – Can Annuities Fill the Gap?

    Millions of Pensions Dumped – Can Annuities Fill the Gap?

    Every time you turn on the news it seems we are bombarded with information on pension reform or the scaling back …Read More »
  • Are Annuity Complaints on the Rise?

    Are Annuity Complaints on the Rise?

    Mom always said; “If you don’t have anything good to say, don’t say anything at all.”Well, we want you to …Read More »
  • Who Should Not Buy Annuities?

    Who Should Not Buy Annuities?

    Are You One of These Five Profiles who probably should NOT buy an annuity?Are you an Aggressive Investor with an Appetite …Read More »

View Our Newest Videos! Subscribe Now
  • Annuity Guys Videos - Annuity Answers
  • New Annuity Guys Videos
    Our Entertaining & Informative
     Saturday Morning Video Blog
  • Timely Retirement & Annuity Issues - Easy Opt Out
  • This field is for validation purposes and should be left unchanged.


  • Is a Pre-Issued Annuity right for you? – Part 1

    Is a Pre-Issued Annuity right for you? – Part 1

    This is a two part blog on Pre-Issued Annuities. In part 1 we will examine some of the reason why …Read More »
  • Will Rising Interest Rates affect Stocks, Bonds, and Annuities?

    Will Rising Interest Rates affect Stocks, Bonds, and Annuities?

    With President Biden overseeing our pandemic induced V shaped recovery, some experts believe the Federal Reserve Bank needs to begin …Read More »
  • Annuity Rates vs Bank Interest Rates  – Which is Best?

    Annuity Rates vs Bank Interest Rates – Which is Best?

    Since something is better than nothing, then more of that something is usually even better – thus, the reason why so many traditional bank savers have …Read More »
  • Millions of Pensions Dumped – Can Annuities Fill the Gap?

    Millions of Pensions Dumped – Can Annuities Fill the Gap?

    Every time you turn on the news it seems we are bombarded with information on pension reform or the scaling back …Read More »
  • The New – Immediate Hybrid Annuity™

    The New – Immediate Hybrid Annuity™

    What could be better than a Hybrid Annuity? How about a New – Immediate Hybrid Annuity™!For a typical retiree with …Read More »
  • Should You Choose a Variable Annuity?

    Should You Choose a Variable Annuity?

    Occasionally, we get requests from our site visitors and viewers to help them review a particular annuity – like that from …Read More »
  • What are Hybrid Annuities?

    What are Hybrid Annuities?

    Hybrid annuities, also referred to as hybrid income annuities, are essentially a type of annuity contract that allows the account …Read More »
  • OutCome Based Planning™ for Retirement

    OutCome Based Planning™ for Retirement

    We practice and recommend a “Holistic – OutCome Based Planning™ process when considering annuities.” This approach has the effect of …Read More »
Get Newly Released Annuity Guys® Videos on Saturday Mornings
  • Annuity Guys Videos - Annuity Answers
  • New Annuity Guys Videos
    Our Entertaining & Informative
     Saturday Morning Video Blog
  • Timely Retirement & Annuity Issues - Easy Opt Out
  • This field is for validation purposes and should be left unchanged.


  • Top Five Reasons, Not to Buy an Annuity!

    Top Five Reasons, Not to Buy an Annuity!

    Let’s be honest, there are plenty of reason why someone should not buy an annuity. As Annuity Guys, we understand …Read More »
  • Are Annuities Improving With The Economy?

    Are Annuities Improving With The Economy?

    Annuities have been on a significant growth upswing since the equities market started tanking in 2008. So if annuities were …Read More »
  • Optimizing Annuity Income for Retirement

    Optimizing Annuity Income for Retirement

    If we only had a nickel for every phone call that came into the office which started out like this…“Hello, This is …Read More »
  • Five Annuity Obstacles to Overcome

    Five Annuity Obstacles to Overcome

    Purchasing an annuity for retirement can be a difficult and stressful decision. For many people this means re-positioning a portion of their retirement assets as …Read More »
  • Is the Fiscal Cliff a Threat or an Opportunity for Annuities?

    Is the Fiscal Cliff a Threat or an Opportunity for Annuities?

    The “Fiscal Cliff” could have profound implications on the economy. Dick and Eric examine the potential impact on retirees and …Read More »
  • Identifying Unethical Annuity Advisors

    Identifying Unethical Annuity Advisors

    Practicing as a financial advisor is an honorable profession that is dishonored when its practitioners employ abusive and deceptive sales …Read More »
  • Sell in May and Go Away or Buy Annuities?

    Sell in May and Go Away or Buy Annuities?

    Life is full of profound statements and sayings that stick in our minds. For investors and brokers, the saying “sell …Read More »
  • Why Should Anyone Rely on an Annuity?

    Why Should Anyone Rely on an Annuity?

    By protecting your income foundation with an annuity or annuities — and including Social Security and/or a pension as non-commercial …Read More »
  • Study Finds Near Retirees Get Crushed! Can Annuities Help?

    Study Finds Near Retirees Get Crushed! Can Annuities Help?

    A recent headline from the Yahoo Daily Ticker caught our attention – American Incomes Are Falling And Near-Retirees Are Getting …Read More »
  • Annuity Timing – Jump in or Wait?

    Annuity Timing – Jump in or Wait?

    Annuity Guys®, Dick and Eric examine the question on the mind of many people when comes to selecting an annuity …Read More »

 

Empowering Annuity Reference Book

 
Start Reading Now - Instant Download
  • Annuity Guys Reference Book - 250 pages of Annuity Facts

  • "The New Retirement"
    Annuity Reference Book 
    Free Instant Download
  • Confidential - Easy Opt Out
  • This field is for validation purposes and should be left unchanged.

 
Comprehensive Site Terms and Disclosure | Privacy Policy | Copyright © 2025 Annuity Guys®


  ** Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Annuities are not FDIC insured and it is possible to lose money.
Annuities are insurance products that require a premium to be paid for purchase.
Annuities do not accept or receive deposits and are not to be confused with bank issued financial instruments.
During all video segments, Dick and Eric are referring to Fixed Annuities unless otherwise specified.


  *Retirement Planning and annuity purchase assistance may be provided by Eric Judy or by referral to a recommended, experienced, Fiduciary Investment Advisor in helping Annuity Guys website visitors. Dick Van Dyke semi-retired from his Investment Advisory Practice in 2012 and now focuses on this educational Annuity Guys Website. He still maintains his insurance license in good standing and assists his current clients.
Annuity Guys' vetted and recommended Fiduciary Financial Planners are required to be properly licensed in assisting clients with their annuity and retirement planning needs. (Due diligence as a client is still always necessary when working with any advisor to check their current standing.)



  # Investors should consider the investment objectives, risks, charges and expenses of a variable annuity and its underlying investment options. The current prospectus and underlying prospectuses, which are contained in the same document, provide this and other important information. Please contact an Investment Professional or the issuing Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.


  ^ Investors should consider investment objectives, risk, charges, and expenses carefully before investing. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.


  ^ Eric Judy offers advisory services through Client One Securities, LLC an Investment Advisor. Annuity Guys Ltd. and Client One Securities, LLC are not affiliated.


819 SHARES