Baby Boomers: Act Now on This Chance to Maximize Your Social Security

This popular – and lucrative – strategy for maximizing Social Security benefits will be going away, but those who qualify can still sign up until April 29. (Don't let SSA workers tell you otherwise.)

Photo (cc) by 401(K) 2013

Determining the best age at which to claim your Social Security benefits can be daunting. But if you (or your spouse) is at least 66 now and you’re financially savvy in selecting a Social Security claiming strategy – like “file and suspend” – that allows you to maximize your benefits, you could get tens of thousands of dollars in extra Social Security income to live out your golden years.

Many married Americans have opted to “file and suspend” their Social Security benefits over the years. It’s been a popular – and lucrative – claiming strategy that has enabled some couples to collect as much as $50,000 extra in lifetime benefits.

“Under file and suspend, when a married person turns 66, he or she can file to claim Social Security benefits but then ask to hold off on getting paid benefits,” the Chicago Tribune explains. It’s usually a husband. The reason: By taking the official action of claiming the benefits, he sets in motion a rule in which his spouse can then claim what are known as ‘spousal benefits.’ Those benefits are a portion of what the husband would receive based on his own working years.”

But this profitable strategy is set to expire. In its vote on the Bipartisan Budget Act of 2015 last fall, Congress voted to eliminate file and suspend, as well as terminate the ability to file for a spousal benefit without also triggering your own retirement benefit. New participants only have until April 29 to sign up.

The policy hasn’t yet changed

Unfortunately, many people who are still eligible to sign up for file and suspend have been turned away or inadvertently given misinformation by Social Security field agents, according to financial advisers.

“There is rampant confusion in Social Security offices,” Russell Settle of SocialSecurityChoices.com told the Tribune.

Although SSA field agents are reportedly being trained on the file and suspend option, time is running out for potential participants.

Keith Duncan, a financial adviser and Social Security educator, writes in the Great Falls (Montana) Tribune that although SSA workers are “nice people,” they are not the best people to work with when you’re trying to figure out benefit calculations or claiming strategies to best maximize your Social Security income in retirement. Duncan writes:

[SSA employees] help recipients get all the benefits they are entitled to right now. They want to do the right thing. But sometimes paying the most benefits immediately conflicts with the long-term objective of receiving the most benefits over a lifetime. Making the right claiming choices can make a huge difference in retirement income for you and your spouse.

Here’s what you need to know

if you — or your spouse — were born on or before April 30, 1950, you’re eligible for file and suspend. And you don’t need to bother seeing an SSA field agent. If you want to avoid potential confusion or misinformation, you can apply for file and suspend online.

Click here to set up an account on the SSA website. After your account is set up, you can file online for benefits. If you opt for the file and suspend claiming strategy, Duncan said you need to indicate that in the comments section by explaining that you want to suspend your delayed credits to age 70.

Big benefit, small cost

We partner with a company called Social Security Choices. They’re one of a handful of companies that provide a personalized analysis of various claiming strategies. While most charge in the $50 range (Kiplinger offers a report for $49.95) Social Security Choices sells its product for $39.95. But Money Talks News readers can do better.