BY ELLEN CLAWANS

COMMENTARY

There is plenty to consider when determining the best time to start collecting Social Security as an individual, but what if you are married? What additional strategies, or planning considerations, are there to maximize your total combined benefit? One strategy, called “file and suspend,” is a lesser-known, perfectly legal, approach that may benefit couples.

In general, a married individual is eligible to receive the higher of their own Social Security retirement benefit based on their own earnings history (termed “individual benefit”), or 50 percent of their spouse’s benefit (termed “spousal benefit”), but not both. So, if 50 percent of your spouse’s Social Security benefit (calculated at their full retirement age) is greater than your own benefit, it makes sense to claim spousal benefits instead of your individual benefits. However, in order to claim spousal benefits, your spouse (the “primary” spouse) must have already applied themselves.

But what if the primary spouse doesn’t want to start collecting yet? What if they are still working and don’t want their benefits reduced, or what if they want to wait until after full retirement age in order to receive “delayed retirement credits” and thus increase their individual benefits? To address this, a technique called the file and suspend strategy was passed into law under the Senior Citizens Freedom to Work Act in 2000.

The law allows the primary spouse to apply for, but suspend collecting benefits, so that the other spouse can start collecting their spousal benefits. The catch is that the primary spouse has to be at least at full retirement age. By suspending benefits, it allows the primary spouse to continue to earn delayed retirement credits and therefore increase their own individual benefit until they want to start collecting. Note, however, that delaying past full retirement age will NOT increase the amount of spousal benefits, just the primary spouse’s individual benefits; i.e., spousal benefits are capped based on the primary spouse’s benefits at the primary spouse’s full retirement age.

So for instance, “file and suspend” can be used when Spouse #1’s benefit is higher when based on Spouse #2’s earnings history rather than his or her own earnings history, AND Spouse #2 is at full retirement age, AND Spouse #2 doesn’t want to start collecting yet. This especially works well when Spouse #2 is also the older spouse. (Keep in mind that if Spouse #1 begins collecting prior to his or her own full retirement age, that their spousal benefits will be reduced by a set formula.) For the time between Spouse #2’s full retirement age and when they want to start collecting, Spouse #1 can collect benefits. There’s no reason for Spouse #1 to wait until Spouse #2 starts to collect. Spouse #1 doesn’t benefit from Spouse #2 delaying their own benefit past full retirement age anyway!

You will have to contact Social Security to initiate a file and suspend strategy, but of course, consulting your financial advisor may be the best place to start. He or she can help you review your options to help determine if this strategy is right for you.

Ellen Clawans CFP®, CPA, is a financial advisor at Brinton Eaton, a national wealth management firm located in Madison, New Jersey. Ellen can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 973-984-3352.