Social Security: Tactics to Boost Benefits

Earlier this week, I wrote about a transaction called a Social Security "do-over" where you can repay and then restart your Social Security benefits anew at a higher monthly payment.

That move may only work for certain folks in specific situations, but there are other tactics to consider that can increase your retirement payout from Social Security.

One such move is called "file and suspend."
Here is how it works:

• The breadwinner husband files for his benefits at full retirement age and his spouse (with little or no earnings history) files for her spousal benefits.
• The husbands request to file also includes an immediate request to suspend his benefits. By doing this, his spouse is allowed to begin receiving her spousal benefits.
• Later, ideally at age 70, the husband commences benefits when his benefit is a larger monthly amount. Due to something called "delayed retirement credits" his monthly benefits will be increased by about 8 percent for each year he delays benefits up until age 70.

This strategy works best where one person, the husband in this case, has the earnings history and the spouse with little or no earnings history is younger.

Another tactic is called the "start and switch."

The basic idea is to start collecting spousal benefits for the main earner and later, at age 70, suspend receiving spousal benefits and file for full Social Security Benefits.

It works this way:

• One spouse stops working and begins collecting her regular Social benefits at age 62. The other spouse, with a higher earnings history and has reached full retirement age, continues to work and has not begun to collect his regular benefits.
• The working spouse, starts receiving spousal benefits, which would be about half of his spouses monthly benefit.
• At age 70, he would suspend receiving the spousal benefit and switch over or file for his full Social Security benefits.

The tactic can provide a few additional years of social security benefits. It works best where both spouses have worked and each has accumulated a substantial earnings history.

You should sit down with and speak to a knowledgeable individual at your local Social Security office and get the details of your specific situation to determine if one of these tactics can work for you.

A final word: you would be well served to hire a CPA or fee only financial advisor to review any of these moves before you make them.

Ray Martin

View all articles by Ray Martin on CBS MoneyWatch»
Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.

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