How to File and Suspend Social Security Benefits Online Before 4/29 Deadline

If you’re between the ages of 62 and 70, you could be eligible for an additional Social Security benefit of up to $60,000 via the 'file and suspend' benefits claiming strategy ­– but only if you act by April 29.

Tax season has just ended – breathe a sigh of relief – so it might be daunting to think about another deadline. But thanks to a little-known loophole in Social Security rules, individuals who have reached their full retirement age of 66 but want to delay collecting their benefits still can activate a spousal benefit for their husband or wife.

What's 'File and Suspend?'

Under the current rule, a spouse age 66-70 can receive up to roughly $15,000 a year for four years in spousal benefits, while at the same time, both the spouse and the primary earner hold off on receiving their normal Social Security retirement checks. Once the main breadwinner begins receiving Social Security retirement checks, the partner can continue to receive spousal benefits.

The four extra years of spousal benefits alone are a great deal – so great that the federal government is putting an end the program. Beginning April 30, spouses will only be eligible to receive spousal benefits once the primary earner has begun receiving benefits. (For related reading, see: ALERT!: Social Security File and Suspend Deadline is 4/29.)

The loophole was created 16 years ago as a side effect of an act of Congress, to allow people to return to the workforce after they had started collecting benefits. Last year, as part of the budget deal, Congress passed a new law to shut down the loophole. One estimate put the potential bill to the Social Security system as high as $9.5 billion a year.

To close the loophole, Congress modified the workings of two Social Security retirement filing options: the spousal-only benefit (or technically, “filing a restricted application”) and the file and suspend (or “voluntary suspension of benefits request”).

A spousal benefit is 50% of the primary earner’s retirement benefit. Normally, when a married person files for benefits, they will receive, in effect, a monthly check for higher of their own retirement benefit or their spousal benefit. A spousal-only benefit is obtained by telling Social Security that you want to be paid only your spousal benefit, even if it is the lower amount. And in most cases, payment of the spousal benefit won’t start until the primary earner also starts receiving payments. The one exception is if the primary earner applies for his or her retirement benefits and then immediately suspends receiving the actual payments. (For related reading, see: File and Suspend: Still an Option, But Act Fast.)

It’s the file and suspend application that is crucial in the next two weeks. The higher-earning spouse needs to file for Social Security benefits, but then immediately suspend receipt of his or her payments by April 29. I’ll explain how to do this shortly.

Who's Eligible?

Not everyone can pull this rabbit out of their hat. Remember, the only people who can request the spousal-only benefit payments are baby boomers who are between their full retirement age, currently 66, but less than 70 years old. And the only people who are eligible for this special spousal-only benefit are individuals ages 62-70 whose spouse has suspended the start of Social Security payments.

Assuming that you are eligible to submit a file and suspend application, is it actually worth doing so?

As you might have guessed, the answer is, "it depends."

There are numerous considerations: Your marital status, your work history, your planned retirement date and your life expectancy, and a few other details all might play into your decision. (For related reading, see: Social Security File and Suspend Claiming Strategy is Ending: Now What?)

Your decision on whether to submit a file and suspend application before the April 29 deadline should be based upon an understanding of how the various retirement options apply to your unique situation. But generally speaking, if you are married and fall into the relevant age bracket, it could be advantageous for the spouse with the higher benefit to file and suspend.

And even if you’re single, it might make sense to file and suspend your benefits anyway, by the April 29 deadline, to retain flexibility on how to receive your suspended payments in case you want to “unsuspend” or reinstate your benefits in the future.

You don’t have to make this complicated decision on your own. An independent financial professional such as a financial advisor or planner can assist you with this choice. For do-it-yourselfers, online calculators can help identify a so-called Social Security maximization strategy. Information gleaned from credible websites can be invaluable. Finally, the telephone number for the Social Security Administration – (800) 772-1213; (TTY 1-800-325-0778) - is staffed by real people between 7:00 AM and 7:00 PM.

How to File and Suspend Online

If you decide to proceed, you’ll want to submit your file and suspend request online here.

When you get there:

First, fill out the application to apply for your own retirement benefits. Your application will be nearly identical to a regular retirement application. The only (big) difference is that in Step #2 you are going to suspend the payments to you in order to keep the option open for your spouse to collect spousal benefits. As a bonus, by suspending your benefits for a few years, the Social Security Administration rewards you by giving you an 8% annual increase on your payment.

Second, indicate on your application that you want to suspend your benefits. The only problem is that there is no question on the application that plainly asks, “Is this a file and suspend application?” or “Do you want to suspend your benefits?” Don’t look for it. It doesn’t exist. (Perhaps the Social Security Administration never really wanted to promote this option in the first place, ya think?)  

Don't Be Fooled!

There is a question that looks like the right one, but don’t be fooled. The application does ask, “If you are eligible for both retirement benefits and spouse's benefit, do you want to delay receipt of retirement benefit?" Sounds close, but the fine print reveals this is actually directed at someone seeking spousal-only benefits, not primary earner benefits. You should answer this imposter’s question with a firm “No.” A “no” here means your filing remains a regular application, which you will then need to suspend by typing in the request manually. (For related reading, see: Social Security File and Suspend to End: How to Adjust.)

To do so, find the “Remarks” tab along the top of the screen. This tab allows you say (type) the magic words to suspend your benefit payments. I recommend typing in the following sentence, verbatim, using big, bold letters so they can’t be overlooked:

"THIS IS A REQUEST, EFFECTIVE IMMEDIATELY, TO APPLY FOR A VOLUNTARY SUSPENSION OF MY RETROACTIVE (WHERE APPLICABLE), CURRENT (WHERE APPLICABLE), AND FUTURE RETIREMENT INSURANCE BENEFITS (RIB) IN ORDER TO EARN VOLUNTARY DELAYED RETIREMENT CREDITS (VOLDRC)."

Obvious, right? Make sure you review, sign and submit you application. Print out your confirmation screen and hold onto it. It is your proof that you beat the deadline. As long as you submitted your application on or before April 29, it will be processed under the existing, more favorable, rules. (For related reading, see: Alternatives to Social Security's File & Suspend Claiming Strategy.)

Taxes filed? Check. Social Security application submitted? Check! The magic act is now concluded {applause}. Take a bow. Place your fedora back on your head (cocked slightly to one side) and breathe second sigh of relief. You’ve earned it.

The Fine Print: Note that we did not cover many important topics, such as: are you already claiming benefits, are you a widow or survivor or divorced, are children claiming benefits, disability benefits, Medicare, family maximum, lump sum payments, withdrawing an application, taxes etc., etc. This short guide only presents the most typical cases, and makes many assumptions. You cannot, and should not, rely on this information as the sole basis of your Social Security retirement application filing. This is not financial planning, investment, tax or legal advice. There are no guarantees that it is accurate. It may contain errors. You must do your own homework and eat your vegetables. Sorry. But at least you understand more about your own Social Security benefits, which you earned through many years of hard work, than you did five minutes ago. You will be able to impress your about-to-be-retired friends. And, if you follow all the links, you will learn everything you need to know and more, and then even impress yourself.