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Question:


Should I file for Social Security benefits at the age of 62 and suspend them until I am 70?
-AlvinLA


Answer:


The strategy that you’re referring to, known as “file and suspend,” can boost Social Security benefits, but usually only for someone who’s married and whose spouse has a less extensive work history than the person considering the strategy. A married person is entitled to the greater of two monthly amounts: whatever he or she has accrued while employed or else half of whatever his or her spouse is eligible for. Let’s say that your normal retirement age, as far as Social Security is concerned, is 66, that your monthly benefit would be $1,600 at that age and that your wife’s monthly benefit, if she retired at 66, would only be $600 because of her limited time in the workplace over the years. Instead of claiming that $600, it would make more sense for her to claim the spousal benefit of $800 – half of the $1,600 that you’re entitled to.

But suppose you don’t want to start collecting yet because monthly benefits rise by 8 percent for every year that recipients delay receiving them. If you hold off until you’re 70, for instance, you’ll have $2,112 coming to you each month instead of $1,600. But there’s a potential problem: The spousal benefit is only available if the main breadwinner has applied for his or her benefits. This is where “file and suspend” comes in. The rules allow couples to get the best of both worlds; you can file at 66, then immediately suspend collection of benefits until 70 (or whatever other age you desire). That way, your wife can collect the spousal benefit now and you can collect the higher monthly benefit that you’ll be entitled to in four years.

-Conrad de Aenlle



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