By Russell Gloor, National Social Security Advisor at the AMAC Foundation, the non-profit arm of the Association of Mature American Citizens
Ask Rusty – Should my Husband File and then Suspend His Benefits?
Dear Rusty: My financial advisor used a computer program which told my husband to take his SS at age 68, then suspend it after a few months. What I understood was if my husband started and then stopped taking distributions, he would earn delayed retirement credits and thus get more at age 70. I know waiting increases SS amounts, by 8% a year, but does purposely starting and then stopping SS increase distributions even more? Signed: Confused
Dear Confused: Suspending receipt of one’s SS benefits after their FRA (as in your husband’s case) does result in him earning Delayed Retirement Credits (DRCs), but the DRCs earned accumulate at the same rate as if he simply waited longer to claim his SS benefit in the first place. DRCs are earned up to 70 years of age, at which point your husband’s maximum SS benefit is attained (FYI, DRCs earn .667% of additional benefit for each month benefits are delayed or suspended, or 8% per year).
But I see no advantage to your husband starting his benefits now (at 68) and then suspending them several months later to earn DRCs – the number of DRCs earned are the same in either case, so he could simply wait to apply for his Social Security benefits until he is 70 to get his maximum amount.
The only rationale I can think of to claim and then suspend after doing so is to get a few months of his benefit payments before suspending. But the few months he received benefits before suspending will be considered when he later unsuspends his benefit, so that his total payment amount will be a bit less at 70 than it would otherwise be if he simply waits longer to claim SS.
And, just for information, he can’t “file and suspend” his benefits so that you can receive a spousal benefit from him. That option (to file and suspend, enabling a spouse to receive benefits) was eliminated by the Bipartisan Budget Act of 2015 – while your husband’s benefits are suspended, you cannot receive a spousal benefit from him.
So, frankly, I see no advantage to your husband claiming his benefit now and then suspending them a few months later. If his goal is to maximize his SS benefit, then the best way to do that is simply wait longer to claim.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.
