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Can you start SSN for a year, then stop it and earn more credits for waiting.

Mar 12, 2014 by C from Foristell, MO in  |  Flag
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The answer depends on a few factors:

  1. Your Full Retirement Age (FRA)
  2. When you plan to begin (or when you began) drawing social security benefits, and
  3. Whether you are talking about "withdrawing" or just "voluntarily suspending" benefits

People born 1943-1954 have a Full Retirement Age (FRA) of 66.

If you draw social security early (before FRA) and you change your mind, you can have a "do-over" but only if you "withdraw" your application within 12 months and pay back all benefits received. Then your retirement credits will be calculated as if you never received social security in the first place.

On the other hand, if you didn't start receiving social security until your Full Retirement Age, you then have a couple of options. You can either "withdraw" and payback benefits if you're within the 12 month time frame, or you can "voluntarily suspend" benefits.

What's the difference?

A "withdraw" and payback (within 12 months) means that you'll continue to earn delayed retirement credits back to your FRA of 66. Example: someone who starts drawing at age 66, changes their mind before age 67, withdraws their application and pays back all benefits, and then reapplies for benefits at age 70. They will receive an 8% increase in benefits for each year they didn't draw. In other words, their age 70 benefit will be 132% of what their age 66 benefit would've been.

A "voluntary suspension" does not involve any payback of benefits. Instead, delayed retirement credits are earned from the point at which you suspended. Example: someone who starts drawing at age 66, changes their mind at 68, voluntarily suspends their claim, and then restarts benefits at age 70. The delayed retirement credits would then be earned from the benefit level at age 68, not back to age 66.

There are many complexities and moving parts to all this--even more so when it involves married couples. Feel free to contact me if I you'd like to discuss your situation in more detail.

All the best!

Comment   |  Flag   |  Mar 12, 2014 from Clackamas, OR

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You can "withdraw" your application for benefits but it must be done within 12 month of qualifying for benefits. If you take that route you must repay any and all benefits received. At that point you would earn credits for waiting. It sounds like you may be beyond the 12 month timeframe. At that point if you are under age 70 you could suspend benefits.

Comment   |  Flag   |  Mar 12, 2014 from Medina, OH

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Depends on your age when you first claim. There is no short answer to this one. But generally the "magic age" for doing something like this is age 66. Once you reach what Social Security defines as Full Retirement Age (FRA) you have a couple of strategies that might accomplish this. One is called File and Suspend. That allows a married couple for example to have Spouse A File and immediately suspend their own benefits. But then Spouse B will be eligible to claim the spousal benefit associated with Spouse A's primary benefit. So Spouse B can draw the spousal benefit at that time while Spouse A waits to let's say age 70 and Spouse A's primary benefit will continue growing. Nice thing about this strategy is the Survivor benefit is also growing since it will eventually be the larger of the two benefits.

Another possible strategy is now only available within 12 months of when you file for your own Primary Benefit. You can change your mind and so request SSA to stop paying you. But you also have to pay back all the money you've already received from SSA within that first 12 months. But if you do this they will treat it as if you never claimed in the first place.

This gets tricky fast. Let me know if you need a closer look at your options given your specific circumstances. We use some very sophisticated software to help people consider the multiple combinations possible for them through SSA. Good luck! :)

Comment   |  Flag   |  Mar 12, 2014 from Georgetown, TX

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