In our previous post, we discussed what is social security file and suspend strategy. The primary purpose of pursuing the strategy is that, by filing for benefits, the individual can render his/her spouse eligible for spousal benefits (which only apply once the primary worker has applied for retirement benefits), while the individual themselves can still earn delayed retirement credits.
Now we will use an example to illustrate.
Example 1.
Jim, a 66-year-old worker eligible for a $1,500/month benefit, can choose to file-and-suspend, allowing his 66-year-old wife Betty to begin a $750/month spousal benefit, even as Jim continues to accrue 8%/year delayed retirement credits on his $1,500/month, allowing it to ultimately rise to $1,980/month (plus cost-of-living adjustments) by age 70.
Notably, the ability to suspend benefits is available only to those who have reached full retirement age (66 years old for those born between 1943 and 1954; as high as age 67 for those born in 1960 or later); if benefits are filed early, the election generally cannot be undone (though you can change your mind and withdraw your application within 12 months of when you first filed).
Stay tuned for our next blog post on the file and suspend strategy.
Now we will use an example to illustrate.
Example 1.
Jim, a 66-year-old worker eligible for a $1,500/month benefit, can choose to file-and-suspend, allowing his 66-year-old wife Betty to begin a $750/month spousal benefit, even as Jim continues to accrue 8%/year delayed retirement credits on his $1,500/month, allowing it to ultimately rise to $1,980/month (plus cost-of-living adjustments) by age 70.
Notably, the ability to suspend benefits is available only to those who have reached full retirement age (66 years old for those born between 1943 and 1954; as high as age 67 for those born in 1960 or later); if benefits are filed early, the election generally cannot be undone (though you can change your mind and withdraw your application within 12 months of when you first filed).
Stay tuned for our next blog post on the file and suspend strategy.
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