Is the File and Suspend Strategy Right for You?

Update: After May 2, 2016, this file and suspend strategy will no longer be offered by the Social Security Administration, due to new rules that came in with the recent budget budget agreement. There was no change for couples who are already using this approach.

The file and suspend strategy is a technique for increasing the total lifetime Social Security income for a married couple. It applies in situations where both spouses are eligible to file for benefits but prefer to delay for a few years or until age 70 when the Social Security benefit reaches the maximum.

By using this strategy a couple was able increase their total Social Security income by as much as $50,000, for example, but each situation will vary.

Basically, one spouse brings in extra income by claiming the spousal benefit.

By delaying filing against their own earnings records the couple will receive higher benefit amounts when they finally decide to claim.

The spousal benefit is 50% of the full retirement benefit, or less if claimed before full retirement age.

Of course this is only possible if both spouses can afford to wait for the higher benefits, either by working longer or by living on retirement savings.

Think of it as a marriage bonus.

How to Implement this Strategy

When the younger spouse reaches retirement age, the older spouse files for benefits (if they haven't already) and then immediately suspends, assuming they aren't ready to receive benefits yet. The younger spouse then applies for the spousal benefit.

As each spouse reaches age 70 or whatever point they choose, they each apply for benefits on their own record.

But There Are Risks To Consider

There are risks to this strategy, however. The biggest risk, in my opinion, is sacrificing a better lifestyle now for higher future benefits and possibly not being healthy enough to enjoy them. Why not go for the sure thing and enjoy the better lifestyle now?

Or worse than bad health, there's the risk of not reaching that age. So your health and your financial situation, needs and goals should be considered before choosing to delay benefits.

A Side Note on Spousal Benefits

Suppose you or someone you know didn't work enough to be eligible for Social Security benefits. If that person was ever married for at least 10 years to someone who is eligible, they may be eligible for a spousal benefit. Knowing this might be helpful to someone you know.

Where To Get More Information

You can read more about the spousal benefit at ssa.gov, search for "spouse benefit" and you'll see lots of info. For more articles about the file and suspend strategy check Forbes.com and search for it, and on cbsnews.com search for "boost spouses social security".

On the AARP website there is a benefit calculator that also describes how this strategy fits into your specific situation.

To get details from Social Security you can visit your local branch office.

You should ask about spousal benefits rather than "file and suspend strategy", because they may not be familiar with it by that term.


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