How to Use Social Security’s 'File and Suspend' Option
Q: Do I have to be 66 (my full retirement age) before I can file for Social Security benefits and suspend, or can I file at age 62, when first eligible, for my wife to start collecting? Second, I know that her spousal benefit is based on my earnings record. I plan to work to age 70 or longer so my earnings base will increase every year. Will the spousal benefit recalculate every year and increase accordingly. or is the spousal earnings base frozen at the time of filing? —Peter
A: You cannot file and suspend before 66—your full retirement age, or FRA for short. If you file sooner, you will have no choice but to begin collecting your retirement benefits. And if your wife files for spousal benefits before her FRA, she will be deemed under Social Security rules to also be filing for her own retirement benefit. Social Security does not pay full benefit amounts to people it considers "dually" entitled. Instead, it pays an amount that is roughly equal to the greater of the two benefits.
Spousal benefits are, indeed, automatically recomputed whenever your annual earnings are large enough to be included as one of the top 35 years of earnings during your life
I don't know the age gap between you and your wife, or the difference in expected benefits based on each of your earnings records. But in the case of spouses of different ages, you should explore what happens if the younger spouse files for spousal benefits after the older spouse has reached FRA.
Under this strategy, the older spouse (I am going to assume here it is the husband) would file and suspend and let his benefits rise due to delayed retirement credits. As I noted earlier, the younger spouse will trigger her own retirement benefit if she files for a spousal benefit prior to FRA. Her benefits thus will be hit with early retirement reductions.
Still, getting these payments for several years may make sense to you. However, benefits will be greater if she can wait until her own FRA, at which point—because deeming ends at full retirement age—she then could file just for a spousal benefit and defer her own retirement benefit. It will be 76% higher at age 70 than age 62, and 32% higher at age 70 than age 66. If it winds up being larger than her spousal benefit, she can switch to it at age 70 (or even sooner if it makes sense given your income and spending needs).
Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.
More Social Security advice from Phil Moeller:
How Couples Can Boost Their Social Security Income
Here's a Smart Strategy for Reducing Social Security Taxes
The Hidden Pitfalls of Collecting Social Security Benefits From Your Ex
Read next: The Best Moves to Make So a Nursing Home Doesn’t Bankrupt You