Maximizing Social Security can have a dramatic effect on your lifetime guaranteed income. Social Security is a source of guaranteed income that is indexed to inflation, so it makes sense to get that benefit as high as you can.
This Wall Street Journal article discusses some of the various strategies, which include ‘File and Suspend’ and ‘Restricted Applications.’
If you’re considering an annuity and know that Social Security is a part of your retirement plan, give us a call. We have tools that assist you in making an informed decision about getting the most out of the System.
The File and Suspend approach is described this way:
A claiming strategy called “file and suspend” can help get the most money. Say a husband plans to delay his benefit until age 70. He is allowed to claim his benefit at his normal retirement age—say it’s 66—and then immediately suspend it.
That way, his benefit amount keeps growing—thanks to those delayed retirement credits—but since he did make that initial claim, his wife, at her full retirement age, can file a “restricted” application to claim spousal benefits based on her husband’s record, but not her earned benefit.
Generally, spousal benefits are up to 50% of the other spouse’s monthly benefit at full retirement age (some age restrictions apply). In this scenario, her own benefit now can grow until she hits 70, too.
In one hypothetical “file and suspend” scenario, a couple, both 66, could collect an additional $60,000 by delaying their benefits and the wife taking spousal payouts while they wait, says Lisa Colletti, New York-based director of wealth management at Aspiriant.