The Government Breaks Through On Deficit Reduction, Will Lower Social Security Payments

It's well known that the US government is broke, and if it used accrual accounting instead of cash accounting it would be staggeringly worse, as all of its future liabilities would be shown. Knowing this, government officials are working tirelessly (and even on some weekends, much to the dismay of Jack Lew) to find ways to reduce spending. 

Thanks to all of those long nights scrubbing the budget line by line, a way to save costs has finally been found. As MarketWatch reports,

A popular tool families use to help boost retirement income known as "file and suspend" will be taken away after April 29th of this year, courtesy of the Bipartisan Budget Act of 2015.


File and suspend is essentially a way for one person who is eligible to file for his/her retirement benefits to file, but delay getting them until age 70 (in return for an 8% per annum credit). Once the benefits are filed for, however, that person's spouse can file for spousal benefits and begin to receive those right away, thus increasing income to the couple.


One final element of this strategy is that if the higher income earner dies, the spouse can now receive the full benefit including that 8% per year credit amount earned by delaying, which significantly increases the income of the surviving partner.

The point of cutting out this "loophole" as the government so proudly calls it, is to save money.


Certainly there are no other reasonable cost cutting measures outside of closing "loopholes" for hard working American's who earned their social security benefits (on loan the government by the way).


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