File and Suspend Strategy – Under this strategy, an individual, who is at least full retirement age, will file for his or her own retirement benefits, and then immediately suspend the receipt of those benefits. At this point, spousal or dependent benefits are eligible to be paid out. Doing so enables the collection of some social security benefits based on the earnings record of the filer, but also allows the earning of delayed retirement credits. Delayed retirement credits increase social security benefits by 8% per year, not considering any potential cost-of-living adjustments that may also be added. The collection of delayed retirement credits can continue until the filer reaches age 70. At that point, the retiree will be able to collect a maximized benefit.
Restricted Application Strategy – Using this strategy, an individual, who is at least full retirement age, will file a Restricted Application to collect only the spousal benefit, which is based on the spouse’s earnings record. Similar to the strategy above, this allows the collection of delayed retirement credits until age 70, also allowing a maximized benefit for the higher earning individual.
What do you need to know?
The termination date of these strategies on May 1, 2016 is quickly looming, however you may still be eligible to take advantage. Those who are already collecting under these strategies will be able to continue collecting with no changes. Individuals who will be age 62 or older by the end of 2015 are still eligible to enact the above. Those who will not meet this minimum age threshold by the end of 2015 will not have the above options available, however they will still be able to delay their benefits to earn delayed retirement credits, but no one will be eligible to collect on their earnings record.
If you will be at least age 62 by the end of this year and are still considering your social security collection options, contact us today so we can assist you in maximizing your benefits. Maximizing your social security benefits is an important way to ensure that you retire comfortably!