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Social Security Q&A: Is It Really True that I Can't Suspend Now?

This article is more than 8 years old.

Social Security may be one of your largest assets. What and when you collect will make a huge difference to your lifetime benefits.

Today’s Social Security question is about whether people who are told they can't suspend after receiving benefits really cannot do so.

Question: When I went into the local Social Security Administration office with a copy of your book, I was able to fill out the paperwork to suspend my benefits. I had started at 62, and on the day before I turned 66, I did the paperwork. The one agent wasn’t sure I could, but he filled out the paperwork anyway. Then, since I wanted to start collecting my spousal benefits, I had to wait and talk to another agent. However, when I talked to her, she said that I couldn’t suspend my benefits, even though I showed her the pages in your book. In return, she made a copy of the same regulation, and after copying off the website, showed me where they had added that one could only start and suspend benefits if one was a first-time applicant, before they determined what your benefit amount was. In a curious follow-up, I received a letter from the office that indicated that I would be getting both my benefits and my spousal benefits. The letter stated that I have 60 days to appeal their decision. There is only one office that handles my area. Do you think I should still appeal? I’d like to suspend my payments so I can get the 8 percent additional money per year.

Answer: Let me quote this rule from Social Security Administration’s Program Operating Manual System.

Requesting voluntary suspension: Any primary retirement insurance benefit (RIB) applicant or beneficiary, whether reduced or unreduced, who has reached full retirement age (FRA) may voluntarily ask that we suspend his or her benefits to earn voluntary delayed retirement credits (VOLDRC). This request may be either written or oral, and we do not need a signature. A representative payee can make the request on behalf of the beneficiary.

Note: The receipt of disability insurance benefits (DIB) prior to RIB has no effect on a beneficiary’s request to voluntarily suspend his or her RIB.

So there is no question whatsoever that you can suspend your retirement benefit.

I’ve been contacted a lot of late by people how have been misinformed by Social Security staff. Indeed, a financial planner connected me with her client who never married, took her retirement benefit at 63 and is now 66. She called Social Security five different times. Five different times she was told precisely the wrong thing by the Social Security agents to whom she spoke. Specifically, she was told she was not able to suspend her retirement benefit. Some of the agents told her she couldn’t do so because she hadn’t elected to do so back when she was 63. That’s the totally bogus thing they told this questioner.

Another agent told her she could do so but she’d have to repay all her past received benefits. That too is totally bogus and shows that the agent didn’t know the difference between suspending her retirement benefit and withdrawing it. You can only withdraw your retirement benefit, by the way, within the first twelve months of filing for your retirement benefit.

For this lady—I’ll call her Janet—suspending her benefits is the smart move. Janet will receive nothing for 4 years (and need, by the way, to pay her Medicare Part B premiums out of pocket—this is critically important!), but starting at 70, Janet’s retirement benefit will be 32 percent higher for as long as she lives, which could be till age 100. If she keeps living on and on and every month opens up a check that’s 32 percent larger, she’ll thank her lucky stars she suspended at full retirement age. It took Janet a sixth call to Social Security to come up with someone at Social Security who actually deserved to keep his job. That person agreed that the provision in the Program Operating Manual System said what it said. He also told her that the only way she could suspend her Social Security retirement benefit was to do so in person at the local office. That’s where she is heading. I will keep you all posted!

Now, Martha, back to your case. I presume that when you filed for your retirement benefit at 62 you weren’t forced (under Social Security’s deeming provision) to also simultaneously file for your spousal benefit because your husband hadn’t yet filed for his own retirement benefit (or filed for it and suspended it). So now at 66, you are filing for your spousal benefit and want to wait till 70 to take your own retirement benefit. When you do find someone at Social Security who knows his job, he’ll explain that by filing for your own retirement benefit back at age 62, you gave up the option to ever collect an auxiliary benefit by itself. That is, you put yourself into what I call excess benefit hell where you can only collect the different between the auxiliary benefit in question and your own retirement benefit. So in your case, you can suspend your own retirement benefit and restart it at 70 at a 32 percent larger value, but you won’t be able to collect a full spousal benefit, only an excess spousal benefit, between now and 70. That excess spousal benefit will be calculated as half of your husband’s full retirement benefit (this is also called your full spousal benefit) less 100 percent of your own full retirement benefit. This excess spousal benefit won’t be reduced because you are not taking it early. Now this difference could well be negative or very small. In this case, you’ll get a zero or very small excess spousal benefit until 70 and then starting at 70, you’ll receive your beefed up retirement benefit, plus a beefed down excess spousal benefit. That is, starting at 70, Social Security will recompute your excess spousal benefit. It will be set at the difference between half or your husband’s full retirement benefit less 100 percent of your own retirement benefit after your retirement benefit has been beefed by 32 percent.

If you are following the logic (no small feat, I grant you), your total check at 70 will be your beefed up retirement benefit plus you excess spousal benefit (your full spousal benefit less your beefed up retirement benefit). If your excess spousal benefit, after being beefed down, is still positive, your check, post age 70, will just equal your full spousal benefit. So suspending could actually leave you getting a very small excess spousal benefit between now and 70 and your full spousal benefit after age 70. In contrast, not suspending could leave you getting your full spousal benefit between now and 70 and after age 70.

So, Martha, even though the Social Security staff told you absolutely the wrong thing, it may be better for you not to suspend your retirement benefit and just file for your spousal benefit. Very careful commercial software can work this out for you within a second.

My weekly Social Security column appears on PBS NEWSHOUR’s website.