suspension bridge
June 17, 2015 | by Chris Stein, CFP®, Finance Instructor at Colorado State University
Suspending Benefits & Claiming Spousal Benefits

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Recently we received a question about Suspending Social Security Retirement Benefits, and since it is not the first time we have received this question we felt it a good one to answer in our blog.  The question is:

“I’ve heard you talk on the radio about Filing and Suspending benefits as a strategy to allow your spouse to begin collecting their benefits but allow yours to grow by delaying.  Is it possible to do this if I filed at age 62?”

The short answer is YES, as long as you have attained your Full Retirement Age (FRA).

While the typical strategy is for the higher earning spouse to file and suspend their benefit at FRA to allow the other spouse to claim a spousal benefit, thus allowing both of their own retirement benefits to continue to grow to age 70 (their maximum amount), the ability to suspend your retirement benefit is open to everyone once they reach their full retirement age.  You may wonder why a person would want to do this, so let me explain.

Let’s pretend, as is implied with this person’s question, you filed for retirement benefits at age 62.  As you probably know, this means your monthly benefit will be permanently reduced compared to what you would receive by claiming later, but if you need the money at 62 or maybe didn’t understand the benefit of waiting, you may very well have filed.  If you later on decide you would rather forego some monthly benefits in exchange for getting larger benefits later you can accomplish this by suspending your benefit after reaching FRA.  At that point for each year you suspend, your benefit will grow by 8% up to your age 70.  So in this person’s case if they suspend at 66 (their FRA) they could essentially stop their monthly benefits for 4 years and then turn them back on at age 70 when they will be at least 32% larger (probably more due to COLA adjustments).  So for someone looking to increase lifetime income in future years this is one option worth considering.  Everyone’s situation is unique, but it may be worth considering using other money to live on from age 66 to 70 in order to get that much larger monthly benefit from age 70 to your end of life.  As an additional benefit, this will also increase the survivor benefit to which your surviving spouse may be entitled in the future.

For more information, please use the play button below to listen to the audio post.

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