April 29, 2016 is a magic day for people who are 66 and their spouses. It’s the last day you can claim a retirement benefit that will give you big returns over a long lifetime.

Let’s Look at an Example of How this Works

Susan Smith and her husband, Sam, are both 66. Sam can “file and suspend,” which means he files for his Social Security benefit, but does not receive the checks. He suspends his checks until age 70, getting a bonus payment of 8% a year.

Let’s say he can get $1,500 a month, now, at age 66. He calls Social Security to file and suspend. At the same time, Susan tells Social Security she wants to file for spousal benefits, which are equal to 50% of his benefit, or $750 a month. She begins collecting the money immediately.

 
 

At age 70, Sam collects the extra-large benefit, or 132% of what he would have gotten at age 66. 66. His benefit will be $1,980 a month.

At age 70, Susan can keep getting the spousal benefit of $750 a month or she can switch to her own earned benefit from work, whichever is more. Let’s say her benefit from work was $600 a month at age 66. The spousal benefit of $750 a month was bigger. So she took spousal. But, from age 66 to 70, her work benefit grows 32%, and is now $792 a month. She switches to her own benefit of $792 a month at age 70.

Susan and Sam’s total benefits are a healthy $2,772 a month. At age 66, they would have gotten a lesser $2,250 a month, a figure frozen for the rest of their lives, except for annual inflation adjustments. Instead, they now enjoy the $2,772 a month forever.

All this because they did “file and suspend” before April 30, 2016, when the law changes and they take the benefit away.


If this makes sense in your case, you can call Social Security today and tell them you want to file and suspend. Higher earning spouse files and suspends. Spouse with lower income files for spousal benefit.


Call Social Security 1-800-772-1213. There may be a long wait to make a phone appointment to do this, so do it right now.

There is another big benefit for filing and suspending and waiting till age 70. It is a great life insurance policy for a spouse. When someone on Social Security dies, the benefit goes to the surviving spouse. If Sam and Susan began collecting at age 66, and Sam dies a couple of years later, Susan’s spousal benefit goes away and she begins collecting Sam’s benefit of $1,500 a month.

However, if they wait till age 70 to maximize income, and Sam dies soon after, Susan will collect his benefit of $1980 a month, a much better number for financial security as she deals with widowhood.

When do you plan on starting to receive Social Security? Did you know that suspending your retirement benefit will no longer be possible later this year? What questions about Social Security would you like me to cover in a future article? Please join the conversation.

Bob RosenblattBob Rosenblatt is a former Washington correspondent for the Los Angeles Times, and editor of the Help with Aging website, which features expert information on the finances of aging, dealing with key issues such as Social Security, Medicare, pensions and health. Please visit Bob’s website and sign up for his newsletter.

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