File-and-suspend has become a popular strategy for married couples
who want to get the most from their Social Security benefits. It lets them earn
credits for delayed filing and bring in some Social Security income while they
wait.
Here is the most common way to use file-and-suspend:
The spouse with the higher benefit files at his or her full
retirement age (FRA), then immediately files a notice to suspend payment of
those benefits. That permits the spouse with the lower primary insurance amount
(PIA) to file for a spousal benefit, which is equal to half the higher earner’s
benefit.
That gets some income flowing to the household while the higher
earner continues to accrue higher benefits. The higher earner can wait until
age 70 to begin benefits; the lower earner then converts to his or her own full
benefit.
The couple receives higher individual benefits for the rest of
their lives. If the husband dies first, the widow then converts to a survivor
benefit, equal to 100 percent of her spouse’s benefit.
But the White House has proposed eliminating it on grounds that
it’s a loophole mainly benefiting upper-income households. So if you’ve been
thinking about filing and suspending your Social Security benefits, you better
do it while you still can.
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