Editor’s Note: The day has arrived, folks… At 2 p.m. Eastern time, we’ll know whether the cost of borrowing money is going up. We’ve spilled a lot of ink over the last several days on the fallout from this move.

Stay tuned to tomorrow’s Daily for our recommendations on how to act once the Fed’s interest rate die is cast…


Cuting Money

“I’ve never heard of a change in Social Security law that eliminates benefits for people already collecting… but this is what’s in this [law].”

Boston University professor Laurence Kotlikoff is talking about a recent provision snuck through Congress.

The Social Security expert says the change will cost millions of American households $50,000 in lifetime benefits—or more.

Section 831 of the Bipartisan Budget Act of 2015 changes a key benefit for married couples (or divorced individuals who were married over 10 years). The new law closes a “loophole” called “file and suspend” by May of next year.

If you thought your government holds sacrosanct its obligations to repay your Social Security contributions… think again.

Here’s what the Social Security Administration says on its website about returning your money:

…the idea that Social Security benefits are “an earned right.” This is true enough in a moral and political sense. But like all federal entitlement programs, Congress can change the rules regarding eligibility…

There has been a temptation throughout the program’s history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense…

Congress clearly had no such limitation in mind when crafting the law. Section 1104 of the 1935 Act, entitled “RESERVATION OF POWER,” specifically said: “The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress.”

The issue [was] finally settled by Flemming v. Nestor.

In this 1960 Supreme Court decision, Nestor’s denial of benefits was upheld even though he had contributed to the program for 19 years and was already receiving benefits.

The new law’s “reforms” are hardest on those who turn 62 after 2015… over half the baby boomer generation. But the changes affect older recipients too.

Bottom line: If you’re nearing retirement age (or even if you already claim Social Security benefits), square away your benefits right now. The window to sign up for “file and suspend” is closing fast.

All Palm Beach Letter subscribers can access our Social Security special reports right here. Others can gain access to them right here.

Recommended Link

7,000 reasons to avoid Amazon.com this holiday season

Wall Street Journal best-selling author James Altucher just announced 7,000 reasons to avoid Amazon.com this holiday season.

Anyway, he just released an announcement that shows you how to leverage his best ideas to improve your life and your pocketbook. If used properly, I can confidently say it could turn out to be your best “investment” this year… by a long shot.

Click here to see James’ announcement