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Financial Questions & Answers

Financial Questions & Answers


What is the downside to the file and suspend strategy? –Ann


This is a strategy we think is definitely worth considering to maximize benefits for married couples, especially in a situation where one spouse was a “high earner” and the other has little or no Social Security earnings. It allows the higher income earner, who has reached full retirement age, to file for benefits and suspend their claim, thus allowing the low earner to draw spousal benefits. At the same time, the high earner can earn delayed credits up until age 70, boosting the retirement benefit by about 8 percent per year and providing a bit of protection for their spouse who would receive a larger survivor benefit. As to your question, the potential downside is simply that as a couple you are giving up cash-in-hand by having the high earner delay receipt of benefits. But in the long run, the file and suspend strategy can really pay off.