Deferring Social Security Benefits

By Lindsay Chin

The Social Security system allows workers to begin collecting reduced benefits at age 62. However, those who wait until full retirement age are not ranging from 66 to 67 people. Get some 30 percent higher monthly benefits than those who received benefits at 62. Also those who wait until 70 see about a 60 percent more monthly benefits. Another way to maximize Social Security benefits is for couples to use a strategy known as voluntary suspension or file-and-suspend. However, your spouse must agree by signing the Voluntary Suspension of Retirement Benefits Form. Voluntary Suspension of Payments meaning that you have retired and want to stop your benefit now so you can receive a higher early retirement benefit later or receive a late retirement increase. For example a husband who earned more than his wife would be eligible for more than double her benefits. If he starts collecting early he would reduce his wife’s lifetime benefits and his own. Under the Senior Citizens’ Freedom to Work Act of 2000, which eliminates the Social Security “earnings test” which currently limits the amount of outside income retirees can make without suffering a reduction in Social Security benefits. Under the Act if the husband files for benefits but defers collecting them, and they wife starts to collect on his employment record while he accrues credits for the delay.

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