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Social Security Suspension Of Benefits

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Social Security: The Key to Using File and Suspend to Boost Your Benefits

AMACs founder, Dan Weber, has been in the forefront of the fight to address the problems facing Americas Social Security program. Put simply, the program is paying out more than its taking in, causing a gradual depletion of the Social Security Trust Fund. If left unchecked, projections are that this depletion will cause the Trust Fund balance to be exhausted by 2034, with the result being a scale-down of paymentsas much as 25%to Social Security recipients. As an action-oriented association, AMAC is resolved to do its part to call for action on this very serious problem.Most recently, AMAC has developed a bipartisan compromise bill, titled Social Security Guarantee Act,” taking selected portions of bills introduced by Rep. Sam Johnson and Rep. John Larson and merging them with the Associations original legislative framework to create the new Act.AMAC representatives have been resolute in their mission to get the attention of lawmakers in Washington, meeting with many, many congressional offices and their legislative staffs over the past several years. The Association is gaining ground every day, and you can help–support AMAC in this fight by contacting your congressional representative to add your voice! Visit the Associations website at to learn more about AMACs proposed solution and to obtain a copy of a document outlining the steps that AMAC advocates to resolve this very serious problem.

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Laurence Kotlikoff Laurence Kotlikoff

Laurence Kotlikoff is a William Fairfield Warren Professor at Boston University, a Professor of Economics at Boston University, a Fellow of the American Academy of Arts and Sciences, a Fellow of the Econometric Society, a Research Associate of the National Bureau of Economic Research, President of Economic Security Planning, Inc., a company specializing in financial planning software, and the Director of the Fiscal Analysis Center. Kotlikoffs columns and blogs have appeared in The New York Times, The Wall Street Journal, The Financial Times, the Boston Globe, Bloomberg, Forbes, Vox, The Economist,, Huffington Post and other major publications.

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Option : Withdrawal Of Benefits

full retirement age . It is a one-time option you cannot do it again later.

In addition, you’ll have to pay back in full the amount you’ve been paid. Think of this process as a true Social Security do over. Be aware that if you withdraw your benefits, your family members will no longer receive benefits, and all received benefits will need to be paid back. It truly will be as if you hadn’t applied for benefits at all.

Calculate how much you’ve received in benefits so far, including any benefits paid to your children or spouse and withholdings for Medicare premiums to get a sense of what you will owe back.

When to consider the withdrawal of benefits option

Withdrawing your benefits can be helpful if a new source of income or work emerges soon after your retirement, particularly if you took benefits at a fairly young age. The next time you apply, you’ll be older and have a correspondingly higher monthly payment, which can help you get the most out of Social Security. For instance, let’s say for a 62-year-old who was born after 1960, the retirement benefit would be 30% less for retiring at 62 compared with the full retirement age of 67. And if they waited until 70, they’d receive 124% of their full retirement age benefit. The difference between 70% and 124% of your benefit can amount to hundreds of dollars a month. Choosing a Social Security do-over can be a wise financial choice if you can support yourself without Social Security until an older age.

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Maximizing Social Security Benefits

Most retirees consider their monthly Social Security check a big part of retirement planning. In theory, Social Security seems really simple. You reach age 62, and you can start collecting benefits. Or you wait until normal retirement age to collect a larger benefit. For an even bigger monthly check, wait until age 70. But there are some intricacies of when and how you collect Social Security that can have a huge impact on your lifetime Social Security earnings.

If you start taking your retirement benefits before your full retirement age, your benefits will be at a reduced level. If you continue with your benefits uninterrupted, they will only be increased for inflation.

This Social Security Spousal Benefits Loophole Still Works

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Certain Social Security benefits used to have ambiguous language that allowed individuals to take advantage of loopholes to receive additional retirement benefits on top of what they normally qualified for. The most aggressive of these loopholes were definitively closed by 2020, but the good news is that this social security spousal benefit loophole still works.

Prior to 2015, there were some pretty nifty loopholes to maximize your and your spouses Social Security benefits. Thanks to some ambiguous language regarding these benefits, you could take advantage of these loopholes to receive more retirement benefits than you were strictly eligible for.

One method, known as the claim then suspend method, allowed a worker to claim their benefits before full retirement age, then immediately suspend their benefits, therefore racking up retirement credits while still collecting the spousal benefit. Another strategy, the spouse then worker method, was to live off the lower-earning spouses benefit until the age of 70, at which point the primary wage earners much higher Social Security benefits could be collected.

These were considered aggressive claiming strategies by the Social Security Administration , which estimated that these tactics were mostly employed by more affluent individuals following the advice of financial planners. In response, Congress introduced the Bipartisan Budget Act of 2015 , effectively shutting down the exploitation of these loopholes.

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Medical Improvement Can Stop Both Ssdi And Ssi

The rules surrounding cessation of benefits for medical improvement are the same for Social Security disability and SSI.

If your disabling medical or mental/psychiatric condition improve, the SSA can find that youre no longer disabled and stop your benefit payments. The SSA periodically reviews the case of all beneficiaries to determine whether they are still disabled.

The standards used in continuing disability reviews for determining whether someone has improved enough to return to work are tough for the SSA to meet, and most disability beneficiaries continue to receive benefits after their review. For more information, see our article on Continuing Disability Reviews.

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How To Suspend Social Security Retirement Benefits

It is easy to suspend your retirement benefits at any time after full retirement age but before age 70. You can call the Social Security office or send a letter requesting to suspend benefits. It will take a month for the request to go into action, so if you ask to suspend benefits in October, you will receive your October benefits in November but will not receive a payment in December.

You can also make a request in advance to suspend benefits for a future date. In other words, you can request in May to suspend benefits beginning in December. You cannot request to suspend benefits before you reach full retirement age or after the age of 70.

What Is A Withdrawal Of Retirement Benefits And How Is It Different From Voluntary Suspension

Social Security Mistake Cuts off Benefits

Example: Jane has been out of work for several years. Last month, she turned 62, and applied to collect her Social Security Retirement . Suddenly, last week, she was selected for a good paying job as a legal secretary. The job will pay far more than the allowed amount for those working and collecting Social Security. Jane decides to take the job and withdraw from Social Security.

Here are the important facts about withdrawing from collecting benefits:

  • Social Security will allow only one withdrawal of an application to collect retirement benefits for each worker, and that withdrawal must take place within 12 months of the date you made your claim.
  • If you decide to withdraw, you will be required to repay every dollar you have already received. That includes:
  • All the benefits you received to date
  • All the Medicare premiums paid out of those benefits
  • Any benefits collected by family members on your record. Moreover, family members who claim on your record must consent to the withdrawal.
  • Withdrawing an application and repaying the benefits you received and the Medicare premiums may be a favorable option if you will be in a better financial situation upon retiring, as continuing to work will increase your monthly benefit.
  • If you change your mind about withdrawing, you have 60 days from the date withdrawal is approved to withdraw your request.
  • For more information about withdrawing from retirement benefits, .

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    Restarting Social Security After Fra

    If your retirement planning is in order by the time you reach your full retirement age, this CSR strategy may make a lot of sense. After you suspend Social Security, you still have a few options to consider. For every month that you suspend, you are adding “retirement credits” to your Social Security. For the biggest gain possible, you can consider suspending your claim when you reach your FRA, and then wait until age 70 to restart your claim.

    If you choose this route, the Social Security Administration will reinstate and increase your benefit automatically when you reach age 70. Remember, for every full year that you suspend, your benefit is increasing 8% per year. So if you suspend for 3 years from age 67 to 70, your benefits jumps by 24% when your resume claiming benefitsthat’s a guaranteed benefit that will also increase with inflation for the rest of your life.

    Tip: If you’ve reached your FRA, “run the numbers” to see if you have the financial capacity to fund retirement expenses during the delay period. If you can, then “test drive” the suspension of benefits for a year see how it works for you. Then review this option annually to see that it still makes sense for your situation. Fortunately, there’s no commitment to keeping it in place through age 70. You can employ it for up to 36 months at your discretion.

    What Is Suspending Social Security Benefits And When Should You Do It

    You may choose to collect your Social Security retirement benefits at age 62, but the amount you collect will be reduced until you reach your full retirement age. Full retirement age varies depending on the year you were born its 66 if you were born from 1943 to 1954, increases gradually if you were born from 1955 to 1960, and its 67 if you were born after that.

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    If you have reached full retirement age and begin taking payments at that time, you can suspend those benefits until you reach age 70, according to Why would you want to do this?

    If you suspend your retirement benefit payments, you will earn delayed retirement credits and will get higher benefits at age 70 or whenever you decide to start collecting. You must begin collecting benefits at age 70.

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    Can I Stop And Restart Social Security Benefits

    After age 70 there are no additional delay credits.

    Social Security benefits can have some flexibility in how you receive them, but the flexibility goes away after a while.

    Its possible to start benefits at one age and then stop receiving the benefits, starting them up again later. But this is not always the best option, because it might not work the way you want it to. There are strict limitations on how this can be accomplished.

    A recent reader email reads as follows:

    I took Social Security at 62 after the Great Recession to supplement my loss of income. I have been working since then . I have two projects this year that will put me back in a substantial income level.

    Can I suspend my Social Security income benefits and earn more at a later restart..say 76 or later?

    I am married and my wife earns Social Security from my benefit. She worked for 15 years early on before we had children.

    Absolutely this can be done as the reader suggests. However, since his wife is receiving benefits based on his record, her benefit will be suspended at the same time while his own benefit is suspended.

    This rule came into effect with the Social Security update in 2015. Any time you suspend benefits on a primary record, all auxiliary benefits are suspended as well.

    Read:Im 62, single and never had a retirement account. I have $100,000 to invest, but is it too late?

    Outcome Payments To Mo And Oo Participants In Nstw

    Ask Larry: Do I Need To File And Suspend To Increase My Social Security ...

    The MO and OO payment systems are of special interest because they were first introduced under TTW, and their outcome payments are tied directly to the suspension or termination of benefits for work. Specifically, SSA makes outcome payments in months when a participant receives no DI or SSI-only payment because of earnings, provided that the participant’s EN files a claim for payments with acceptable documentation.

    In this section we report findings from an analysis of the extent to which milestone and outcome payments were made during months that were identified as NSTW months for TTW participants. We focus on the period from 2002 through 2005, omitting 2006 to ensure that sufficient time had passed for all EN claims for payment to have been made and processed at the time the payment dates were extracted for this analysis.

    Table 6. Ticket payments generated from February 2002 through December 2006 among TTW participants assigning under the two new payment systems by December 2005

    Payment system and payment title Number of tickets assigned
    . . .
    NOTES: Sample includes MO and OO participants who assigned their most recent tickets from February 2002 through December 2005. Months when a beneficiary’s ticket was not assigned are excluded. Payment system and payment title are based on ticket-assignment month. Payments generated for months through December 2006 and processed through December 2007 are included.. . . = not applicable.

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    Did You Know You Can Start Stop And Then Restart Social Security

    Check out Social Security claiming strategies that could help those in or near retirement during this time of recession, stock market volatility and rising unemployment.

    As the U.S. entered this recession, the unemployment rate hit a record high. Workers have been laid off or furloughed as businesses closed due to the coronavirus. With payrolls down, the benefits that Social Security offers could be more important than ever to a growing number of people near retirement whose incomes are being impacted.

    Its impossible to know exactly how this recession will impact our economy long term, but we do know it might be impacting how retirees strategize their benefits. Depending on your unique situation, you might find yourself turning to one of these claiming strategies:

    Suspending Your Retirement Benefit Payments

    If you have reached full retirement age, but are not yet age 70, you can ask us to suspend your retirement benefit payments. By doing this, you will earn delayed retirement credits for each month your benefits are suspended which will result in a higher benefit payment to you.

    Before you make a request to suspend your benefits, keep in mind that:

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    How Free Food And Shelter Affect Your Ssi

    If you receive free food and shelter, the SSA will count it as in-kind income, and it can affect your benefits. For example, if you live with your adult child who pays your living expenses, the food and shelter provided to you would be counted as in-kind income, and your SSI benefits would be reduced by one-third.

    Find Out When It’s Worth Considering Despite The Loss Of A Key Strategy

    Can I Suspend My Social Security Benefits?

    Choosing when to start taking Social Security is a key financial decision. The choice you make can have an impact not just on your own financial situation but also on what your loved ones receive from Social Security, both during your lifetime and after you’ve passed away.

    It used to be that suspending your Social Security benefits allowed you to take advantage of a valuable strategy that could boost the total payments you and your family could receive. Law changes have made that strategy largely unavailable, but there are still a couple of situations in which suspending your benefits can make sense. We’ll look at those after giving a brief description of what you used to be able to do by suspending your benefits.

    Image source: Getty Images.

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