In last week's column, I mentioned that older people across the country are panicking because they think they have to take some action, or make some important decisions, with respect to their Social Security benefits by April 30. This panic is being fueled by misleading advertisements and mailers targeting senior citizens. I got one in the mail with this headline in big bold type and all caps: "IF YOU DON'T ACT BY APRIL 30, YOU COULD BE LOSING TENS OF THOUSANDS OF DOLLARS IN SOCIAL SECURITY BENEFITS!" The flyer went on to invite me to a seminar sponsored by a local financial planner where I supposedly would learn what action I would need to take to reap these unexplained government benefits.

Here is my message to the vast majority of senior citizens who are being scared and misled by similar and mysterious come-ons: Chill out! The April 30 deadline very likely does NOT apply to you. If you are already getting Social Security benefits, the upcoming deadline has nothing to do with you. If you are not yet getting Social Security benefits, but are under the age of 66, the deadline has nothing to do with you either.

The deadline only applies to people who are already 66, or who will be 66 before April 30, (possibly August 30 — see below) who are not yet getting Social Security benefits, and who were planning to employ the much-ballyhooed "file and suspend" Social Security maximizing strategy. The opportunity to use that strategy ends on April 30. But before I go any further, I must back up and explain (for the umpteenth time in this column) what this is all about.

Social Security law has always said that if benefits are suspended to the primary account number holder, then they are also suspended for anyone else (usually meaning a spouse) also due benefits on that account.

But that mostly nonconsequential rule was turned on its head in 1996 when Congress passed the "Senior Citizens Right to Work Act." The focus of that law was to allow any senior citizen over "full retirement age" (then 65, but now 66) to work full time and still collect all of his or her Social Security benefits. Prior to that change, working seniors had to wait until age 70 before they could claim their government retirement checks.

But some loopholes in that 1996 law led to some totally unintended benefits that became all the rage among seniors, especially in the last five years or so. Those benefits became known as the Social Security maximizing strategies. One of those strategies is called "file and suspend." The other primary strategy is "file and restrict." Late last year, Congress enacted laws to close those loopholes. The file and suspend loophole closes at the end of April. The file and restrict loophole remains open until 2020. (More about that at the end of this column.)

Here is a very typical example of the "file and suspend" strategy. Bill is 66 years old but does not plan to take his Social Security benefits until he is 70 years old, at which point he would get a 32 percent "delayed retirement bonus" added to his monthly Social Security checks. Bill's wife, Pam, is 62 and has never worked outside the home. Jumping through the "file and suspend" loophole, Bill would be able to file for his Social Security at age 66 and then immediately suspend those benefits. However, Pam would be able to file for benefits on Bill's account and collect spousal benefits even while Bill's own benefits were suspended.

The loophole-closing bill passed last year simply takes the law back to its original intent. It says that Bill has every right to wait until age 70 to start his Social Security benefits if he wants. But if he chooses to do that, his wife, Pam, would also have to wait until Bill starts his Social Security checks before she can claim spousal benefits on his account.

The new law gave people some time to adjust to the changes. That's why the deadline was set at April 30, 2016. So if you are 66, or will be in the next month, and if you want to delay your Social Security until age 70, and if you have a spouse who is eligible for benefits on your account and you want that spouse to get benefits while you wait for the next four years to claim your own, then you have until April 30 to jump through the file and suspend loophole.

But I must add a caveat to this. There is a chance that people turning 66 before August 30 may also be able to file and suspend by April 30. Why? A Social Security application has a "prospective life" of four months. In other words, you can file up to four months ahead of time for benefits to begin later. For example, if you turn 66 in July 2016, you can file by April 30 (before the deadline). However, at the time I am writing this, Social Security lawyers have not yet decided if the intent of the law was that people must be 66 before April 30, or before the prospective life of an April 30 filing date.

There is a related file and suspend loophole that also grew out of the 1996 law. We will use another example to explain it. Let's go back to Bill. But this time, let's say that his wife Pam is not due any benefits on his record. However, Bill still wants to wait until 70 to start his own Social Security. This related loophole allowed Bill to file for his benefits at 66 and then immediately suspend those benefits. Why would he want to do that? Because it gives him an extra option if he later changes his mind. Let's say when he reaches age 68, he decides he does not want to wait until 70. He wants to start his Social Security checks right away. If he does that, he would get a two-thirds of one percent increase for each month between age 66 and 68 that he delayed starting his checks. That comes out to a 16 percent increase. In other words, starting his benefits at age 68, Bill would get 116 percent of his full retirement benefit. But the file and suspend strategy also would give Bill the option of going back to age 66 to start his benefits. He would NOT get the 16 percent increase. But he would get 24 months' worth of retroactive payments, and continuing monthly payments, all at his age 66 rate.

The chance to use that loophole also goes away on April 30. Please note that even after the loophole closes, Bill still can decide to delay benefits until age 70. And he still can change his mind at age 68 if he wants to. And he still would get the 116 percent benefit rate from age 68 on. What he can't do with the closed loophole is claim benefits retroactively to age 66.

Earlier, I mentioned the "file and restrict" strategy. That is the gambit that allows someone 66 or older to claim spousal benefits on a husband's or wife's Social Security account while delaying their own retirement benefits until age 70 to collect the aforementioned "delayed retirement bonus." That strategy can be employed by anyone turning 66 before January 2020. So that loophole remains open for four more years and I'm sure will be the topic of many of my columns over the next 48 months.

If you have a Social Security question, Tom Margenau has the answer. Contact him at [email protected]. To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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