Q&A: Social Security benefits confusion

Dear Liz: In a past column, you discussed a potentially advantageous option for people who started Social Security early. You wrote that when they reached full retirement age, they could suspend their benefits and allow them to grow by earning delayed retirement credits. I am turning 66 this month and have been collecting Social Security benefits since age 62.

I went to a local Social Security field office to request the suspension but was told this option is not available. They couldn’t provide definitive documentation to support their statements but said that by starting benefits at 62 the option to suspend and earn delayed credits from 66 to age 70 doesn’t apply. Can you please clarify your comments and, if correct, suggest how I might be able to convince the representatives at the local office that it is still an option? I have been speaking to a supposed “expert” at the office, not the first person screening my request.

Answer: Unfortunately, the advice you get from local Social Security offices isn’t always accurate.

The representatives you talked to may be confusing benefit suspension with the so-called “file and suspend” option, which Congress eliminated a few years ago. With file and suspend, a higher wage earner could file an application for benefits and immediately suspend it. This allowed a married partner to start claiming spousal benefits while the higher earner’s benefit could continue to grow. Under current rules, partners can claim spousal benefits only if the primary earner is actually receiving retirement benefits.

For those not familiar with Social Security claiming strategies: It’s generally advantageous to wait as long as possible to apply for retirement benefits. The amount you can get grows at roughly 7% annually between age 62, which is the earliest you can apply, and your full retirement age, which is currently 66 but which will gradually rise to 67 for people born in 1960 and later. Between your full retirement age and age 70, you can earn so-called “delayed retirement credits” that further boost your check by 8% each year.

If you start early and realize you made a mistake, you can suspend your benefits at your full retirement age. Your checks will stop, but you don’t have to repay past benefits. And the amount you receive — although still reduced by your early start — can earn delayed retirement credits.

This probably isn’t a good option if you have other people drawing benefits based on your record, such as spouses or dependent children, because the suspension would stop their benefits as well.

Suspension also is different from the “do over” option that allows you to repay any benefits you’ve received and completely restart the clock on your benefits, as if you’d never started them. That option is allowed only in the first 12 months after your initial application.

Given that your local reps are confused, you should point them to the Social Security Administration’s web page on the matter.

It couldn’t be clearer. The first sentence reads: “If you have reached full retirement age, but are not yet age 70, you can ask us to suspend retirement benefit payments.” The page goes on to say your benefits will be automatically restarted at age 70, when those benefits max out, but you can restart at any time before that if you want.

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