Once you reach your FRA (full retirement age), you can "file & suspend". Basically this means that you are telling the social security agency to not start paying you yet but it allows others, like your spouse, to file for their benefit based on your record.
This is an interesting strategy to begin receiving some social security in the household. Then, when your spouse reaches full retirement age that person can begin to receive their full benefit based on their own record. You, in turn, have allowed your benefit to continue to grow until you decide to take the benefit.
It is simple to do, check the box at the end of the normal application form.
"File & Withdraw" is another strategy that may be useful, if applicable. Complete Form 521 and repay all benefits previously received (but note that all interest/gains on those funds do not have to be repaid, you can keep those).
Why?
Social security is just like an annuity except the payout is better than a life insurance company and it is backed by the government. So, with this strategy, you are purchasing a single-premium annuity for your lifetime. And, your surviving spouse, continues to receive your higher benefit after your death as the survivor.
If, for example, you had started your benefits at age 62 (at 70%-80% of your normal retirement age benefit) and are now age 70 with a very healthy lifestyle and longevity in your family, then you can repay the benefits and begin receiving the age 70 benefit. This may be a substantially higher monthly benefit (from age 62 to 65, the monthly benefit increases 20%-30% and then from age 65 to age 70 it increases at 8% per year, for another increase of about 35% - substantially more than your age 62 benefit.
Why not?
It still takes about 15 years to break-even on this deal, so if you get hit by a bus, then your heirs lost out on that nest egg that you just used to purchase your new lifetime annuity through social security. If you are married, though, consider the potential remaining lives of both of you.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.