What Is Double Dipping on Social Security Benefits?
In an age in which the necessity of certain entitlements is constantly being called to question, quite a few things that were once acceptable are now being called into question. Indeed, given the array of loopholes in existence, and the antiquated nature of many of the laws and program guidelines, there are plenty of ways for people to take advantage of the system. “Double dipping” on your social security benefits is one example. The following is a closer look at how this works.
What is Double Dipping Social Security Benefits?
Simply put, “double dipping” is a method of collecting your benefits in which you withdraw both your personal benefits and your spouse’s benefits at different points. To do so, when the person files for benefits, they must file for their spouse’s benefits specifically. From there, the office will typically assume you are requesting the higher of the two and simply grant you the higher amount. However, if they delay taking her own benefits until they are older, their own benefits will increase in the meantime.
For instance, if a 62-year-old woman files for social security benefits, she can take her spouse’s benefits until she is 65. By the time she is 65 or 70, her own benefits will have increased in value and she will then have enough money of her own to live comfortably in retirement.
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The History of Social Security
Although this has become a relatively common practice amongst many married couples, it was not always possible. For instance, before a law was signed by John. F. Kennedy in 1961, which allowed people to take their retirement benefits earlier, there was virtually no need for double dipping. In particular, the law allowed people to retire a few years early but also mandated that they must take a reduced benefit in order to do so. Furthermore, a law signed by Nixon in 1972, allows SS beneficiaries to receive an ad-hoc cost of living increase annually. Furthermore, in 1983 Nixon signed a law that raised the age of retirement from 65 to 67. Thusly, this created the means and motivation for many to find a way to retire early without losing the chance to receive their full benefits.
The Future of Double Dipping
Although many have grown comfortable with these practices, the future looks bleak for the who plan to use this method of securing benefits. The Bipartisan Budget Act of 2015 officially makes it illegal to claim your spouse’s benefits while waiting for your own to mature. Therefore, those who were born after 1953 will be unable to use the “double dipping” method as a means of achieving early retirement without losing their full benefits.
Overall, although there is nothing legally wrong with “double dipping” in SS, many have questions about its ethical value. Indeed, just because it is not illegal for someone to file for their spouse’s benefits while waiting for their own to mature, doesn’t mean it is right. However, even the government realizes that this loophole has been allowed to persist, and therefore, there will likely be no serious penalty for those who have done this in the past. However, moving forward, the ability to do so no longer exists.
Therefore, anyone who was born after 1953 and may have believed that they could simply retire early and live off their spouse’s benefits until their benefits reached 100%, will need to regroup and make another plan for their retirement.