Justin Anderson & Bibi Taylor: ‘Suspending’ Social Security Benefits

[Noozhawk’s note: One in a series of Social Security-related columns by Ameriflex representatives. Click here for a related article.]

Q. Did you know you can “suspend” Social Security benefits?

A. If a person files and begins receiving Social Security benefits, there is an option to suspend the benefit and to start re-accumulating the 8 percent annual delayed credits at full retirement age until age 70. This may be a strategy that someone would consider in order to take advantage of the delayed credits if they resume employment and, thus, have earned income.

Q. What are the primary strategies to the claiming-age decision?

A. » Widow(er) strategy — Widows and widowers can take a reduced benefit on one record and later switch to a full benefit on the other record.

» Claim now, claim more later strategy — switching from spousal to own benefit.

» File and suspend strategy — working spouse files and suspends in order that nonworking spouse can receive spousal benefit.

» Triple-dip strategy — spouse with lower Social Security benefit claims from their record until spouse with higher benefit files and then spouse can receive higher spousal benefit.

» Maximize the survivor benefit strategy — delaying the primary worker’s benefit to ensure larger benefit is available for surviving spouse if primary working spouse dies first.

» Minimize the “tax torpedo” strategy — minimize tax consequences by trading retirement asset income for Social Security income.

» Maximizing through suspension-of-benefits strategy — benefits suspended due to going back to work, which results in recalculated benefits at full retirement age.

Readers: Email your Social Security questions to bibi.taylor@ameriflex.com.

— Justin Anderson, CFP, CRC, CLU, is a financial planner and Bibi Taylor, MBA, is the Social Security project coordinator at AmeriFlex, 3700 State St., Suite 310, in Santa Barbara. Call 805.898.0893 for more information. Financial advisors and registered representatives associated with AmeriFlex Financial Services offer securities and advisory services through SagePoint Financial Inc., member FINRA/SIPC. Insurance services offered through AmeriFlex Financial Services, which is not affiliated with SagePoint Financial Inc. or registered as a broker-dealer or investment advisor. Registered representatives may only discuss and/or transact securities business with residents of the following states: AR, AZ, CA, CO, FL, GA, IL, IN, MI, MO, NC, ND, NJ, NM, NV, NY, OH, OR, PA, PR, SC, TX, VA, WA, WI.