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File and Suspend?

One very important decision facing most retirees is when to begin taking Social Security (SS) benefits. This issue can also be very confusing because of the number of variables involved.   If you are unmarried the timing is not nearly so important, but for married couples a wrong decision can cost them thousands of dollars over their remaining lifetimes. 

If you were born between 1943 and 1954, you can begin receiving your full SS benefits at 66.  For those born after 1954, the full retirement age (FRA) begins to increase until it is 67 for those born in 1960.  We can begin taking a reduced amount at 62 (reduced 5/9 of 1% for each month you begin prior to your FRA), and many do.  If you really need your benefits to comfortably retire, then the choice is obvious; take them as soon as you can.  There are a couple of scenarios however, where it may make sense to delay.  If you are financially able to delay taking SS benefits, your eventual monthly payment increases by that same 5/9 of 1% each month until you reach your FRA.  If you delay past your full retirement age, the benefit you eventually receive will increase 8% per year up to age 70.  If you are still working at 62, you will begin to lose $1 in benefits for every $2 you earn over $14,640 in 2012.  If either of these situations describes you, you may want to delay your benefits. In the past most have chosen the “bird in the hand” option and began benefits as soon as they could, but as retirees face the prospect of living longer, the decision to take benefits as soon as possible may be less appropriate for some, especially married couples.

There are a number of techniques that can increase a married couple’s eventual SS benefits.  One technique is called “file and suspend,” and this is particularly appropriate for a couple where one spouse has a much higher earnings record than the other.   In such a case, the person with the higher earnings could file for and then immediately suspend his benefits, allowing his/her spouse to begin taking “spousal benefits” based on the higher earner’s record.  This would allow the eventual benefits of the higher earner to continue to increase (potentially until age 70) since he/she would not be receiving benefits.  This technique is allowed only after the one suspending benefits reaches full retirement age. If the one receiving spousal benefits could draw more on his/her own earnings record, then obviously that is what they should do.  A spousal benefit at FRA is 50% of the primary earner’s FRA amount, called the “primary insurance amount” by the SS Administration.  Of course if the spouse begins taking the spousal benefit prior to their reaching FRA, it too will be reduced somewhat for each month the recipient is less than FRA.

Filing and suspending can accomplish a couple of things for a retired couple.  It allows them to begin receiving some benefits from the system earlier in their retirement than they may have thought while allowing the benefits of the higher earner to continue to grow.  And, perhaps more importantly, it allows the eventual survivor’s benefits to continue to grow.  Supposing that the husband is the higher earner and that he dies first, the wife, after first receiving spousal benefits, can then step up to whatever his full benefit would have been.  In this case “filing and suspending” allowed the couple to increase their cash flow early in retirement while still increasing the wife’s survivor’s benefit.  If your situation lends itself to “filing and suspending,” I strongly urge you to consider this approach.

 There are many options for a married couple when it comes to determining when to take SS benefits.  Filing and suspending is but one.  A cottage industry has grown up to help folks with this decision, and a number of different software suppliers claim that theirs can help you make this choice.  One is the Social Security Analyzer at  It isn’t free, but you may want to check it out. At a minimum, you should talk with a trusted advisor before committing to a decision. The bottom line is to be very careful with this decision and insure you fully understand the ramifications before you make it.

Remember, money is not the most important thing, but still, money matters.


Michael Ryan


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    Response: Arthur Falcone
    Retirementflightplans - Journal - File and Suspend?

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