Can You Help Me Understand The File And Suspend Rule?

Category: 
Aug 25 2018 - 7:16am

Current age: 651/2
Divorcee
Spouse: Deceased

I wanted to take advantage of the file and suspend rule:

I wanted to claim my ex-husband's benefits and freeze my benefits until a later time. However the social security agent told me that I could not do it because my spouse's amount was smaller so I could not file and suspend.

I thought that I could collect his at the lower rate until I was ready to claim mine.

Can you you help me understand.

Hi,

The most important thing for you to understand is that you DO NOT want to use file and suspend. File and suspend describes a strategy of filing for your retirement benefits at full retirement age (FRA), but then suspending them in order to accrue delayed retirement credits (DRC). DRCs are earned at a rate of 2/3rds of 1% per month (i.e. 8% per year) for each month that you defer taking retirement benefits between FRA and age 70. Thus, by waiting until age 70 to start drawing your retirement benefits you can receive a benefit rate that's 32% higher than your FRA rate.

The reason that you don't want to use file and suspend is because if you file for and suspend your retirement benefits you can't draw any other type of benefits, such as surviving divorced spousal benefits in your case (https://www.ssa.gov/planners/retire/suspendfaq.html). Assuming that you meet the requirements (https://www.ssa.gov/OP_Home/handbook/handbook.04/handbook-0403.html), what it sounds like you should probably do instead is simply file a restricted application for surviving divorced spousal benefits only. You could then file a separate application for your retirement benefits when you reach age 70. You'll will receive the same amount of DRCs if you simply wait until age 70 to apply for your retirement benefits as you would if you filed for and suspended them. You would likely want to file for the surviving divorced spousal benefits as soon as your earnings would permit payment of benefits, so if you're not working or earning too much you would probably want to file ASAP.

You should strongly consider using our maximization software both to confirm that the strategy outlined above would in fact be best in your case, and to determine the optimal month to claim your survivor benefits.

Best, Jerry