willthrill81 wrote: ↑Fri Oct 16, 2020 6:31 pm
JoeRetire wrote: ↑Fri Oct 16, 2020 12:00 pm
tj wrote: ↑Thu Oct 15, 2020 8:40 pm
ObliviousInvestor wrote: ↑Thu Oct 15, 2020 6:52 pm
fsrph wrote: ↑Thu Oct 15, 2020 6:50 pm
Say you're receiving SSDI and reach full retirement age. Can you then defer your regular SS till 70 years old to capture the 8% per year gain in benefits?
Yes. When you reach FRA your disability benefit is converted to a retirement benefit. At that point, it's just a normal retirement benefit, and you have the option to voluntarily suspend it, as would anybody age FRA-70 who is receiving a retirement benefit.
Anybody? If you take it at 62, you can then suspend it from 67 to 70 and benefit from that?
Yes you can. You'll get delayed retirement credits for each of the months you delay.
So, your benefit at 62, plus 8% for each year from 67 to 70.
I'm completely unfamiliar with this. So someone could start benefits at 62 and then suspend them from age 67 to 70 in order to increase the initial benefit by 24% (8% x 3 years)?
What would be the purpose of this approach? I doubt that this is an 'actuarial loophole'.
I suppose that if a retiree encountered a poor sequence of returns that taking benefits at 62 could help to reduce portfolio withdrawals, and if the portfolio sufficiently recovered five years later, the retiree could suspend in order to boost the benefit.
From SSA: https://www.ssa.gov/benefits/retirement ... spend.html
Suspending Your Retirement Benefit Payments
If you have reached full retirement age, but are not yet age 70, you can ask us to suspend your retirement benefit payments. By doing this, you will earn delayed retirement credits for each month your benefits are suspended which will result in a higher benefit payment to you.
If you qualify for benefits as a Survivor, your full retirement age may be different.
Before you make a request to suspend your benefits, keep in mind that:
If you apply for benefits and we have not yet made a determination that you are entitled, you may voluntarily suspend benefits for any month you have not received a payment.
If you are already entitled to benefits, you may voluntarily suspend retirement benefit payments up to age 70. Your benefits will be suspended beginning the month after you make the request.
We pay Social Security benefits the month after they are due. If you contact us in June and request that we suspend benefits, you will still receive your June benefit payment in July.
You do not have to sign your request to suspend benefit payments. You may ask us orally or in writing.
If your benefit payments are suspended, they will automatically start again the month you reach age 70.
If you change your mind and want the payments to start before age 70, just tell us when you want your benefits reinstated.
Voluntary suspension begins no earlier than the month after the month of the request. We may accept advance requests for voluntary suspension; however, suspension cannot begin earlier than:
The month after the month of the request.
Your full retirement age.
Your month of entitlement to benefits (for initial claims only).
If you voluntarily suspend your retirement benefit and you have others who receive benefits on your record, they will not be able to receive benefits for the same period that your benefits are suspended. However, a divorced spouse will be able to continue receiving benefits.
If you voluntarily suspend your retirement benefit, any benefits you receive on someone else’s record will also be suspended. Your Medicare Part B premiums cannot be deducted from your suspended benefits.
If you request voluntary suspension we will only permit benefit reinstatement the month after your request.
For more information on voluntary suspension, read the Filing Rules for Retirement and Spouses Benefits.
Before You Make Your Decision
If you suspend your retirement benefits:
The Centers for Medicare & Medicaid Services (CMS), will bill you for future Part B premiums, if you are enrolled in Medicare Part B (supplemental medical insurance) .
These premiums can’t be deducted from your suspended retirement benefits, or your suspended spouse or ex-spouse’s benefits. If you do not pay the premiums timely, you may lose your Part B Medicare coverage. (You will have the option of automatically paying the bill from an account at your bank or financial institution.)
If you also receive Supplemental Security Income (SSI) benefits, suspending your retirement benefits will make you ineligible for SSI.
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