If you're collecting Social Security retirement benefits, and decide that you don't really need the money, you may have the option of suspending your benefits. Here's how to determine if you're eligible to suspend your Social Security retirement benefits, the advantages of doing so, and how to start the process with the Social Security Administration.
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Should you suspend your Social Security benefits?
If you're currently collecting Social Security retirement benefits and you have reached your full Social Security retirement age, but are younger than 70, you can choose to suspend your benefits.
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There are a few situations where it might make sense to suspend your Social Security benefits. As an obvious example, if you simply don't need the money yet, it can make sense to let your future benefits grow. Or, since Social Security is based on your 35 highest-earning years, suspending your benefits during your highest-earning years could result in a higher calculated benefit amount, on top of the higher monthly benefits you'll get for delayed retirement.
Pros and cons of suspended benefits
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The primary motivation for suspending Social Security is to allow your retirement benefit to grow. An 8% "delayed retirement credit" will be given for each year your benefits are suspended, and these credits can accumulate until as late as age 70. If your benefits are still suspended when you reach age 70, they will restart automatically in the month of your 70th birthday.
For example, if you choose to suspend your benefits at age 67 and resume collecting them at age 69, you can expect your monthly payment to be permanently increased by 16%, in addition to any cost-of-living adjustments (COLA) that are implemented during those two years.
On the other hand, there are some negative factors to consider before suspending your retirement benefit. In addition to the obvious fact that you won't have your Social Security income for a period of time, you should take the following into consideration:
- If other people (such as a spouse or a child) receive benefits based on your work record, they will no longer be able to collect those benefits while yours are suspended. (Note: Divorced spousal benefits are an exception.)
- If you suspend your retirement benefit, any benefits you receive on someone else's work record, such as a spousal benefit, will also be suspended.
- If you're enrolled in Medicare Part B, you'll be billed directly for your premiums. If you don't pay the premiums, you can lose your coverage.
- Suspending Social Security retirement benefits will automatically make you ineligible for Supplemental Security Income (SSI).
Here's how to do it
You can request to suspend your benefit payment either orally or in writing. You can contact the Social Security Administration (SSA) by phone at 1-800-772-1213. Or, you can go to your local Social Security office to make your request -- here's the link to find the office closest to you. You're welcome to just show up during the office's business hours, but it's highly recommended that you make an appointment first, as wait times can get rather lengthy.
It's important to note that Social Security benefits are paid the month after they're due -- for instance, you get your January benefit payment in February. So, if you make your request to suspend benefits in one month, you'll still receive that month's benefit during the following month.
If you change your mind within 12 months of claiming, you can withdraw your claim instead
As a final point, if you first started collecting your Social Security benefits less than 12 months ago, you have another option that may be a better choice -- withdrawing your application altogether. This option is available to all Social Security retirement benefit recipients, not just those who have reached full retirement age.
To withdraw your application, you'll have to repay all the benefits you (and your family) received, but doing so effectively erases your application from the system. If you later apply for Social Security, say at age 70, your benefit will be calculated as if it were the first time you applied.
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