09 Jan Can I suspend Social Security so my wife gets a benefit?

Q. I will be 65 next April. I believe this puts my full Social Security benefits date to 66 1/2. My wife is 62 with virtually no benefits. Can I sign up for Social Security at 65 but not collect benefits while my wife collects half of my benefit? What would happen if we waited until age 70?
— Filer

A. Nice try, but the strategy you’re thinking about for Social Security is no longer available for many beneficiaries.

The 2016 Federal Budget bill eliminated the popular Social Security so called “restricted applications” and “file and suspend” for those born after Jan. 1, 1954.

“These options for receiving Social Security payments enabled many to increase their anticipated lifetime benefit by taking a spousal benefit first, while allowing their own to grow 8% per year until age 70,” said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

The scenario you mention is a version of “file and suspend,” in which your wife would begin collecting Social Security immediately based upon your earnings record, but you would wait until full retirement age to collect yours.

“According to the Social Security website, those born in 1955 would receive full benefits at age 66 and 2 months,” she said. “For your wife, who is 62, full retirement age would be 66 and 6 months.”

Mott said if you choose to file for Social Security at age 65, which is 14 months prior to full retirement age (FRA), your benefit will be reduced by 7.8% permanently. Under this scenario, your wife is filing at age 62, which will cause her benefit to be reduced from the standard 50% of your Primary Insurance Amount to 32 1/2% permanently.

“However, if you decide within the first 12 months of starting to receive benefits that you wish to stop so that you can refile later, you must complete Form 521, Request for Withdrawal of Application and repay Social Security the amount of benefits that you and your spouse received,” Mott said.

With this information as background, your wife would not be able to collect the full 50% of your benefit unless you file at FRA and she also attains her full retirement age four months after you, Mott said.

Even though your wife’s benefit is calculated based on the amount you are eligible to receive, Social Security benefits are paid to each person independently, she said.

“If you decide to wait until age 70 to collect your benefit, your wife will not be able to file until that time as well,” she said. “She will be above FRA and can begin collecting at the same time. Your benefit will have increased 30 2/3% and your wife will be entitled to 50% of that benefit amount.”

Should you predecease your wife, she would be entitled to a survivor’s benefit which is based on the full value your Primary Insurance amount at the time of your death, Mott said.

You should call Social Security at (800) 772-1213 or make an appointment at your local office to go over your options.

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This story was originally published on Jan. 9, 2020.

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