Suspending Social Security Retirement Benefits and continuing to work past full retirement age is a big decision to make, with many factors to consider. This article discusses important considerations in making this decision, as well as the difference between suspending benefits and withdrawing from receiving benefits.

What should I consider if I suspend benefits past full retirement? 

The following are things to keep in mind if you decide to suspend receiving Social Security benefits:

• If you are not receiving benefits, you will need to pay out-of-pocket for your Medicare premiums. Medicare gives you the option of having the payment automatically deducted from your checking account.
• If you have not done so by age 66, be sure to apply for Medicare. Delaying your Medicare application can end up costing you heavily in available plans and in plan premiums.
• Social Security Retirement benefits are paid the month after they are due. For example, If John contacts Social Security in July to suspend benefits, the agency will still pay his July benefit in August. Benefits will be suspended thereafter until he requests that they be resumed.
• You cannot request a suspension of benefits until you reach full retirement age.
• A voluntary suspension applies only to retirement benefits. Family benefits and survivor benefits cannot be voluntarily suspended.

Example: Rene was born in July of 1955. Their full age of retirement for collecting Social Security Retirement benefits is age 66. They will reach full retirement age in July of 2021. However, they are still working full time as a CPA and have no plan to retire. Is it worthwhile for Rene to delay retirement until age 70? The answer depends on their earnings and life situation.

Suspending benefits past age 66 means Rene will earn “delayed retirement credits” with the Social Security Administration. The delay will boost their monthly benefit amount by 2/3 of 1% for each month benefits are suspended or 8% for each suspended year. If they waits to collect Social Security Retirement until age 70, their monthly benefit may be 32% higher than the amount they would receive at age 66. They do not have to repay the one month of benefits they already received.

How can suspending benefits impact my family 

A voluntary suspension means family members who have claims based on your work record cannot collect benefits. This is not the case for ex-spouses who are entitled to collect benefits based on your work record; their benefits can continue while your benefits are suspended.

For more information about suspending social security retirement benefits, Click Here. 

What is a withdrawal of retirement benefits and how is it different from voluntary suspension? 

Here are the important facts about withdrawing from collecting benefits:

• Social Security will allow only one withdrawal of an application to collect retirement benefits for each worker, and that withdrawal must take place within 12 months of the date you made your claim.
• If you decide to withdraw, you will be required to repay every dollar you have already received. That includes:
  • All the benefits you received to date;
  • All the Medicare premiums paid out of those benefits;
  • Any benefits collected by family members on your record. Moreover, family members who claim on your record must consent to the withdrawal.
• Withdrawing an application and repaying the benefits you received and the Medicare premiums may be a favorable option if you will be in a better financial situation upon retiring, as continuing to work will increase your monthly benefit.
• If you change your mind about withdrawing, you have 60 days from the date withdrawal is approved to withdraw your request.

Example: Adrian has been out of work for several years. Last month, they turned 62, and applied to collect their Social Security Retirement (collecting at age 62 means their benefits would be reduced by 25% for the rest of their life). Suddenly, last week, they were selected for a good paying job as a legal secretary. The job will pay far more than the allowed amount for those working and collecting Social Security. Adrian decides to take the job and withdraw from Social Security.

For more information about withdrawing from retirement benefits, Click Here. 

To locate your local Social Security Office, Click Here.