You’re eligible for Social Security retirement income if you paid SS taxes as an employee and earned the required number of SS credits. If you’re now receiving benefits, you might want to stop payments and collect later on. The Social Security Administration allows you to suspend payments or withdraw your application for benefits, depending on your age and how long you’ve been collecting.
The earliest you can collect SS benefits is age 62. Collecting early reduces the total payment you’re eligible to receive. You may collect up to age 70, when you receive your maximum lifetime benefit. The full retirement age increases over time from 65, starting with people born in 1938 or later. It continues increasing until it reaches 67 for anyone born after 1959.
If you’re under the full retirement age, receiving SS benefits and changed your mind about when you want payments to start, you can withdraw your original benefits application and reapply later on. However, you must not have received more than 12 monthly payments. And you must pay back all the benefits you received. Payback includes benefits you, your spouse and children might have received, Medicare premium deductions and federal income tax withholding. You must fill out Form SSA-521 and submit it to the SSA to withdraw your application. You have 60 days to rescind the withdrawal.
If you’re collecting SS benefits at the full retirement age, you may ask the SSA to suspend payments. You can access benefits later on, perhaps at the maximum retirement age of 70. With a suspension, you repay only the benefits you collected, not those your spouse or children received. Meanwhile, the SSA attaches what it calls “delayed retirement credits” to your benefits until you start collecting again. Delayed retirement credits increase your benefits between 5 and 8 percent for every year you put off collecting payments.
“Start Stop Start” Strategy
If you started collecting Social Security at, say, 64 and decided at full retirement age to suspend payouts until age 70 and repay the benefits you collected, you’re using a benefits-building strategy called “start stop start.” With delayed retirement credits kicking in, your benefits increase. In fact, you could collect 32 percent more in benefits as a lifetime payout.
Before December 2010, you could collect SS benefits for years, pay back the amount you received and reapply for benefits at a higher rate. The 12-month rule that’s now in effect limits the time the SSA allows you to change your mind about receiving benefits.
Valerie Bolden-Barrett is a writer, editor and communication consultant specializing in best business practices, public policy, personal finance and career development. She is a former senior editor of national business publications covering management and finance, employment law, human resources, career development, and workplace issues and trends.