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A Hub for Those About to or are Retired: Stretching Social Security

Updated on August 5, 2012

It is called the "file and suspend" strategy for those thinking of applying for Social Security benefits. It is a good way to "beef" up those monthly income checks. Upon reaching the prime age (62) or your full retirement age (65-67), you file for the benefit. Then, immediately suspend it. This allows you to earn "delayed retirement credits". These will increase your income by 8% for each full year (if born 1943 or later) you wait to start them again up to age 70. Taking the benefit too early decreases the amount you receive. Basically, if your full retirement age is 66 yrs, but start taking it at age 62, the benefits are reduced 30% that first year, dropping less percentage each year until 66 years.

Since many retirees are couples, if a husband files at age 66, then suspends payment to get the credits, that is fine. His wife, who also files but does not suspend, would then get half of whatever her husband's amount would have been. When the husband restarts at, say, 70, the credits are added to his SS payments, but not to hers.

The highest benefit gain is 8%, and it depends on when you were born prior to 1943. basically, for every two years, the rate drops .5%, so, if you born in 1941-2, the gain is 7.5%, if 1933-34, 5.5%.


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