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Author: MisterFungi Three stars, 500 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Soc Sec "file & suspend"? Date: 12/31/2013 3:44 PM
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My wife turns 62 tomorrow (yes, Jan. 1.). I turn 65 in March. My wife ran a small business all of her working life, which was personally very rewarding but monetarily much less so. Her expected Soc Sec income will be close to the minimum. Mine, on the other hand, is up near the max (according to ssa.gov).

QUESTION: I've heard something about a "file and suspend" strategy ... something along the lines of my wife getting Soc Sec checks based on (a fraction of) what I would get if I started taking Social Security.

Can anyone here help me out on whether this is something worth checking into? What's the possible downside of doing this "file and suspend"?

Thanks ... and Happy New Year!
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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74032 of 74759
Subject: Re: Soc Sec "file & suspend"? Date: 12/31/2013 4:13 PM
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Here's a good example of 'file & suspend'.

http://www.marketwatch.com/story/social-security-bonus-for-m...

intercst

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Author: MisterFungi Three stars, 500 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74033 of 74759
Subject: Re: Soc Sec "file & suspend"? Date: 12/31/2013 7:13 PM
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Thank you, intercst. If I'm understanding it correctly, both wife and I have to be of full retirement age (66, for us) in order to do the "file and suspend" thing.

http://www.ssa.gov/retire2/suspend.htm

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74034 of 74759
Subject: Re: Soc Sec "file & suspend"? Date: 12/31/2013 7:38 PM
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MisterFungi asks,

If I'm understanding it correctly, both wife and I have to be of full retirement age (66, for us) in order to do the "file and suspend" thing.

The younger spouse collecting on the high earning spouse's record only needs to be 62 to get a reduced benefit.

intercst

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74035 of 74759
Subject: Re: Soc Sec "file & suspend"? Date: 12/31/2013 7:40 PM
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>> Here's a good example of 'file & suspend'.

http://www.marketwatch.com/story/social-security-bonus-for-m......
<<

Show of hands...

How many folks expect this loophole to still exist when we Gen Xers get close to retirement age?

That's what I thought...

#29

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Author: MisterFungi Three stars, 500 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74036 of 74759
Subject: Re: Soc Sec "file & suspend"? Date: 12/31/2013 8:03 PM
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The younger spouse collecting on the high earning spouse's record only needs to be 62 to get a reduced benefit.

That's what I thought. But the ssa.gov example appeared (to me) to indicate otherwise. I am definitely going to look into this!

If, in fact, we can do this (once I turn 66), isn't it "free" money? Is there any reason not to do it, as long as I don't have a need to start receiving my benefits ... particularly since this loophole may be closed sometime soon?

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74037 of 74759
Subject: Re: Soc Sec "file & suspend"? Date: 12/31/2013 8:18 PM
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MisterFungi writes,

Is there any reason not to do it, as long as I don't have a need to start receiving my benefits ... particularly since this loophole may be closed sometime soon?

I don't see any reason not to do it.

Also, I doubt "file & suspend" would get closed. Unlike the SS payback scheme I identified a few years back that only affected a small number of wealthy people (i.e., those with the $150,000 to $200,000 in ready cash needed to fund the payback) file and suspend has a large constituency of average folks. Congress would get an earful if they changed it.

intercst

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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74039 of 74759
Subject: Re: Soc Sec "file & suspend"? Date: 1/1/2014 9:32 AM
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file and suspend has a large constituency of average folks. Congress would get an earful if they changed it.

Please.

Were you around in 1987 when Congress decided to impose income tax on SS benefits? Your money is taxed when you pay into SS, and again when it is paid out to you. Same money, taxed twice.

Yeah, Congress got an earful. And passed it anyway.

Also, when SSA starts to run out of money benefits are going to be cut automatically for *everybody*. You can bet that tricks that some people use to get more money will be under the gun.

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74044 of 74759
Subject: Re: Soc Sec "file & suspend"? Date: 1/1/2014 12:04 PM
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Rayvt: "Were you around in 1987 when Congress decided to impose income tax on SS benefits? Your money is taxed when you pay into SS, and again when it is paid out to you. Same money, taxed twice."

It is generally s not the same money.

The money taxes going in is geenrally paid out long before the taxpayer reaches retirement age.

Your statement makes it sound like my SS tax dollars are sitting in an account somewhere waiting for me to collect them. It was never true at all until 1983, because SS was pay as you go from inception until then.

Since 1983 excess SS taxes buy special treasury bonds (and was used by Saint Ronald to hide the real size of his deficit spending and to dampen the risk of inflation).

Regards, JAFO

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Author: buzman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74046 of 74759
Subject: Re: Soc Sec "file & suspend"? Date: 1/1/2014 6:52 PM
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You can bet that tricks that some people use to get more money will be under the gun.

But File and Suspend is not a trick to get more money. It is a way to potentially raise your benefit; there is a difference.

Social Security benes can choose a benefit based on their earning history or a benefit equal to 50% of their spouse's benefit.

Congress will never change that provision.

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