Economic Security Planning, Inc.
Today's column addresses questions about withdrawing an application for a retirement benefit, filing for and then suspending a retirement benefit and whether and when divorced spousal benefits might be available. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.
See more Ask Larry answers here.
Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.
Should I Withdraw My Social Security Application And Apply Again Later?
Hi Larry, I applied for my Social Security retirement benefit and was approved in June 2020 at 62. But I made too much to receive benefits till next year. Should I withdraw my application and reapply at a later date? Thanks, Jim
Hi Jim, I can't tell you for sure because it depends on how your application was worded and whether or not you want your benefits to resume as soon as your earnings permit payment. If you chose a specific month of election to start your benefits when you completed your original application, then Social Security couldn't adjust your benefit rate to compensate you for the months of non-payment until you reach full retirement age (FRA). That means you'd then be stuck with your age 62 rate at least until you reach FRA. However, if you filed your application with a Social Security representative and you chose a conditional month of election to start your benefits, then Social Security may be able to adjust your benefit rate to your January 2021 rate without you withdrawing and refiling.
I would suggest that you check with Social Security to see if they'll be able to adjust your rate prior to FRA or not. If not, then you would probably better off to withdraw your previous claim and reapply effective with whatever month you wish to begin receiving benefits. You're limited to one application withdrawal in a lifetime, though, so make sure that you end up choosing the right month to start your benefits when you reapply.
You may want to consider using my company's software — Maximize My Social Security or MaxiFi Planner — to fully analyze the options available to you in order to determine your best strategy for maximizing benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
How Do I File And Suspend My Benefits?
Hi Larry, I am 66 and want to file and suspend until I’m 70. How do I do this? I went online to file but there is no where to suspend. I called the SSA twice but they have no idea what I’m talking about. Thanks, Joseph
Hi Joseph, If you don't want to draw benefits until 70, I can't conceive of any reason why you'd want to apply now and suspend your benefits. It would be much simpler to simply wait until you're about to turn 70 to apply, and you'll still accrue delayed retirement credits (DRC) if you wait to apply as opposed to filing now and suspending your benefits..
Essentially, all of the potential advantageous to filing for and suspending benefits were eliminated by the 2015 Social Security amendments. Filing for and suspending benefits can also potentially prevent a person from being able to collect auxiliary or survivor benefits. And the earliest that you can reinstate benefit payments once they're in suspense is the month after you request reinstatement. If you instead simply wait to apply for benefits when you want to start drawing, you would have much more flexibility about choosing when to start drawing your benefits. Therefore, since April 30 2016, filing for and suspending benefits as opposed to simply waiting to apply until you want to start drawing your benefits offers no advantages and several potential disadvantages.
If in spite of all of the above however, you do decide to apply for and suspend your benefits, you would do so by completing an application for Social Security retirement benefits in the normal manner and then including a statement in remarks that states that you wish to voluntarily suspend your benefits starting with your initial month of election to claim benefits. In other words, if you choose to start your benefits in February 2021, for example, your statement in remarks would say that you wish to voluntarily suspend your benefits in February 2021. You would also need to file your application in advance of the month you choose as your month of election to start benefits, because the earliest that you are allowed to suspend your benefits is the month after the month you submit the request for suspension. Best, Larry
Can I Get Benefits From My Wife's Social Security Record When We Get Divorced?
Hi Larry, I am a 73 and presently collecting Social Security. I am presently going through a divorce and was told I can get extra money added to my check from my wife's record even though she is presently not receiving benefits yet. She just turned 65 and doesn't plan on taking her Social Security retirement benefit till seventy. I've called Social Security four times and received four completely different stories. The extra money would be very helpful. Thanks, Jack
Hi Jack, You could only qualify for divorced spousal benefits in addition to your own retirement benefits if 50% of your ex-wife's primary insurance amount (PIA) is higher than your own PIA. A person's PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).
Even if your soon to be ex's PIA is more than twice as much as yours though, the earliest you could qualify for divorced spousal benefits is effective with the earlier of a) your ex's first month of entitlement to her Social Security retirement or disability benefits, or b) two years after the month that your divorce is final. So unless your soon to be ex-wife starts drawing her benefits before then, you won't be able to collect divorced spousal benefits at least until two years after your divorce is finalized. Best, Larry
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