Most everyone knows that you can wait to collect your Social Security benefits until age 70, increasing your monthly benefit at the risk of reducing your lifetime benefit (depending on longevity). Fewer people know about the Social Security “file and suspend strategy” used by married couples to increase their lifetime benefits: one partner files for Social Security but then immediately “suspends” collecting it, thereby making his or her partner eligible to receive spousal benefits during the period prior to reaching age 70 when the full benefit becomes available.
As a growing number of financial planners have begun to explain this Social Security file and suspend strategy to their clients, more and more people are taking advantage of it. As a consequence, there have been added costs for the Social Security Administration. To reduce these rising costs, the Obama administration is now seeking to limit the use of this strategy by the wealthy (although the wealth limits have not yet been determined).
To wind your way through the complex Social Security system we recommend consulting a CERTIFIED FINANCIAL PLANNER™ before you or your spouse files for Social Security benefits. Have the planner provide a Social Security Analysis to clarify which strategy will provide the maximum lifetime benefit for you both. If, on the other hand, you have already filed for benefits but were unaware of the file and suspend strategy, it could still be beneficial to consult a CERTIFIED FINANCIAL PLANNER™ to help you remedy the situation.
Have questions or want to learn more about your own Social Security benefits?
Contact us to request a Social Security consultation.
You may be interested in these Bell resources:
Be Uncommon: On Taking Social Security Benefits
Applying for Social Security: The Importance of Timing
Are You Missing Strategic Benefits from Social Security – April 23, 2014, 2-2:30
Watch a video of the webinar here.