Suspend Social Securty

[treypar]

I started SS at my FRA and am considering suspending payments until age 70. I understand that my SS payment will increase by 8% per year until I restart at 70. Is this correct?

[pb4uski]

Yes... 8% simple... so if you suspend for 2 1/2 years it would increase 20%.

Actually, your question raises an interesting issue for me that someone may know the answer to. My DW was a SAHM so her SS is much less than 50% of mine... and we are the same age. If we both start at our FRA she'll get 50% of my FRA benefit. If say, 6 months later, I suspend my benefits as the OP is considering, will my DH's benefit then drop to what it would be based on her work record? I suspect yes, otherwise what I am thinking would be a way to sidestep the new prohibition over file and suspend for us younger folks.

[joeea]

Quote:

Originally Posted by treypar I started SS at my FRA and am considering suspending payments until age 70. I understand that my SS payment will increase by 8% per year until I restart at 70. Is this correct?

How long ago did you start receiving benefits?

You have 12 months to withdraw your application and start later.
https://www.ssa.gov/planners/retire/withdrawal.html

[pb4uski]

Yes, but you can suspend benefits at any time... you don't have to pay back what you have already received which you would need to do if you withdraw your application.

[Blue Collar Guy]

Quote:

Originally Posted by treypar I started SS at my FRA and am considering suspending payments until age 70. I understand that my SS payment will increase by 8% per year until I restart at 70. Is this correct?

What made you change your mind about collecting now?

[treypar]

I think that the 8% increase may be better than the minimal increases recently.

[GrayHare]

Quote:

Originally Posted by treypar I think that the 8% increase may be better than the minimal increases recently.

It's not really an increase, most of the 8% is merely you getting your investment into the system back over a fewer number of years.

[joeea]

Quote:

Originally Posted by pb4uski Yes, but you can suspend benefits at any time... you don't have to pay back what you have already received which you would need to do if you withdraw your application.

That's true. I was just offering another alternative that the OP may not have known was available.

[joeea]

Quote:

Originally Posted by GrayHare It's not really an increase, most of the 8% is merely you getting your investment into the system back over a fewer number of years.

The increase is for the rest of your life.

If you live long enough, it's clearly an increase overall.

[evilanne]

pb4uski
Seems like it would make sense for her to draw her own SS and keep yours on hold as long as possible. Since women tend to live longer than men...wouldn't waiting until 70 increase your benefit as well has the 50% spousal benefit?

[CRLLS]

A I understand it, Spousal is based only on FRA and not the delayed benefit if the primary delays beyond FR.

SS says: How is the law changing? Under the new law, you can still voluntarily suspend benefit payments at your full retirement age (currently 66) in order to earn higher benefits for delaying. But during a voluntary suspension, other benefits payable on your record, such as benefits to your spouse, are also suspended. And, if you have suspended your benefits, you cannot continue receiving other benefits (such as spousal benefits) on another person’s record.
There are some exceptions. If you are a divorced spouse, you can continue receiving a divorced spousal benefit even if your ex-spouse voluntarily suspends his or her retirement benefit."



I would guess that since the spousal would not be payable, the SAHM would drop back to her own benefits. I don't know for certain. Might be worth a call to SSA.

Also, It is not a matter of simple math to the actuarial breakeven point of a SS person. SS is not gender specific, a female will live longer than a male giving her the longer life. the chances of one person from a marriage outliving the breakeven point rises above the 50% level. So there are ways a person/couple can beat the "system".

[pb4uski]

Quote:

Originally Posted by CRLLS ....How is the law changing? Under the new law, you can still voluntarily suspend benefit payments at your full retirement age (currently 66) in order to earn higher benefits for delaying. But during a voluntary suspension, other benefits payable on your record, such as benefits to your spouse, are also suspended. And, if you have suspended your benefits, you cannot continue receiving other benefits (such as spousal benefits) on another person’s record. There are some exceptions. If you are a divorced spouse, you can continue receiving a divorced spousal benefit even if your ex-spouse voluntarily suspends his or her retirement benefit." ....

Good info CRLLS... I had seen that before and it reinforces what I thought. Perhaps our strategy would be for us to start SS, divorce, I suspend until I'm 70 then start my benefits again and then remarry.

(just kidding).

[mathjak107]

fidelity's new social security optimizer which is an in house tool called from my wife to stop her early benefit at her fra .

she filed at 62 and is collecting and is older than me .

so she suspends until 70. at 70 she files , i will be 68-1/2 and i file restriced on her record .

at 70 i take my benefit and when i file she gets a spousal adder to her benefit .

odds are pretty good i will file at 65 anyway. it is a good balance for us between market risk and longevity risk .

[Chuckanut]

Quote:

Originally Posted by mathjak107 odds are pretty good i will file at 65 anyway. it is a good balance for us between market risk and longevity risk .

+1

For many people taking SS at Full Retirement Age is a very good compromise. Many article/discussions on when to take SS spend a huge amount of time discussing taking it at 62 or 70, as though they are the only two choices we have.

[GrayHare]

Quote:

Originally Posted by joeea The increase is for the rest of your life. If you live long enough, it's clearly an increase overall.

The math takes that into account, unless, of course, suspending changes one's lifespan.

[joeea]

Quote:

Originally Posted by GrayHare The math takes that into account, unless, of course, suspending changes one's lifespan.

I'm not sure which math you are referring to here.

If you are talking about Social Security's math, it was last revised in a time when longevity was lower and interest rates were higher. So today's reality isn't taken into account by that math. For most people, waiting until 70 to begin benefits is a good deal, math-wise these days.

[Sunset]

Quote:

Originally Posted by joeea I'm not sure which math you are referring to here. If you are talking about Social Security's math, it was last revised in a time when longevity was lower and interest rates were higher. So today's reality isn't taken into account by that math. For most people, waiting until 70 to begin benefits is a good deal, math-wise these days.

Good points, I hadn't really thought about the interest rate (or expected stock market returns according to Bogle being lower) than previous many decades avg.