Social Security will comprise an important part of your retirement planning. Whether your benefits will make up a significant portion, or just a fraction of your monthly income, you have the right to various strategies which can maximize those benefits.
You may already know that waiting beyond full retirement age to claim your benefits can result in larger monthly checks. But there is actually a way that couples can reap the benefits of waiting, while also receiving some Social Security income at the same time. This particular strategy won’t be around for long but you could take advantage of it for the next few months if you act fast.
What is file-and-suspend? Once you and your spouse reach full retirement age (65 to 67, depending upon your years or birth), you will be faced with some important decisions about your Social Security benefits. The file-and-suspend strategy allows the higher-earning spouse to delay claiming their benefits, while accumulating more work credits. Eventually, this will result in a higher monthly check when this spouse does retire and claim benefits.
Meanwhile, the lower-earning spouse can claim spousal benefits, which amount to about half of the higher-earning spouse’s anticipated benefits. This will allow the couple to reap some income from Social Security, while maximizing the higher-earning spouse’s benefits for later.
When the higher-earning spouse decides to claim benefits – say, at age 70 – they will be earning a larger check. The lower-earning spouse can now convert to their own full benefit. Now each spouse is receiving individual benefits at a higher rate than they would have received by filing at full retirement age. If the higher-earning spouse passes away first, the lower-earning spouse can even convert to survivor benefits at 100 percent of their deceased spouse’s scheduled amount.
Here’s the problem…
On November 2, Congress reached a budget deal that essentially eliminated the file-and-suspend method. However, since the new law won’t take effect for six months, couples can still take advantage of the old rules. In order to do so, you and your spouse must already have reached full retirement age, or be set to reach full retirement age during this six-month period.
The bottom line with Social Security is that there are dozens of ways for married couples to claim benefits and the only way to know for certain which strategy is best for you is to become fully educated. You should perform an in-depth review of your financial and personal plans for retirement, before making this big decision. Call our office at to arrange a consultation. We can assess your situation and help you decide on the best Social Security option for you and your spouse.
This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency
15040 – 2015/11/16
