What is Social Security File and Suspend Strategy - Part I

Q. What is the Social Security File-and-Suspend strategy and how should I use it?

A. The social security benefits "file-and-suspend" strategy allows an individual to file for benefits but then suspend them immediately, allowing delayed retirement credits to be earned while simultaneously allowing a spouse to begin receiving spousal benefits, and even family benefits for minor children as well. 


The Official File and Suspend Rules
The official social security administration webpage has a clear description of what are the file and suspend rules -

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If you have reached full retirement age, but are not yet age 70, you can ask us to suspend retirement benefit payments. 

• If you apply for benefits and we have not yet made a determination that you are entitled, you may voluntarily suspend benefits for any month for which you have not received a payment. Your request to suspend benefits may include any retroactive benefits that might be due.
  
• If you and your current spouse are full retirement age, one of you can apply for retirement benefits now and have the payments suspended, while the other applies only for spouse's benefits. This strategy allows both of you to delay receiving retirement benefits on your own records so you can get delayed retirement credits.
  
• If you are already entitled to benefits, you may voluntarily suspend current or future retirement benefit payments up to age 70 beginning the month after the month when you made the request.

Some consequences if you use the file and suspend strategy:

There are some things you need to know about what will happen if you suspend your retirement benefits.

• If you are enrolled in Medicare Part B (Supplementary Medical Insurance), you will be billed by the Centers for Medicare & Medicaid Services (CMS) for future Part B premiums.
  
  
• These premiums cannot be deducted from your suspended retirement benefits. If you do not pay the premiums timely, you may lose your Part B Medicare coverage. (You will have the option of automatically paying the bill from an account at your bank or financial institution.)
  

• If you also receive Supplemental Security Income (SSI) benefits, suspending your retirement benefits will make you ineligible for SSI.
  

In our next several blog posts, we will use some examples to illustrate how to utilize this file and suspend strategy.

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