Social Security benefits provide crucial financial support for many retirees. However, under certain circumstances a beneficiary may want to temporarily stop receiving benefits and restart them later.
There are many reasons someone may decide to stop receiving Social Security and the process can be daunting. Therefore, this guide outlines some of the basic requirements to help make sure the process is smooth for anyone wishing to temporarily stop their benefits.
Stopping Social Security Benefits
There are two primary methods to stop receiving Social Security benefits: voluntary suspension and withdrawal of benefits.
1. Voluntary Suspension:
Eligibility: You can voluntarily suspend your benefits if you have reached your full retirement age but are not yet 70.
Process: To suspend your benefits, you need to contact the Social Security Administration (SSA) and request a suspension. This can be done online, by phone, or in person at a local SSA office.
Advantages: By suspending your benefits, you earn delayed retirement credits, which increase your future monthly benefits by approximately 8% per year until you resume them or reach age 70.
2. Withdrawal of Benefits:
Eligibility: If you have not yet reached your full retirement age, you can apply for a withdrawal of benefits.
Timing: You can withdraw your Social Security retirement application within 12 months of your initial entitlement to benefits.
Frequency: You are allowed to withdraw your application only once in your lifetime.
Process: To withdraw your benefits, you must complete Form SSA-521 and submit it to the SSA. You are required to repay all the benefits you and your family have received so far. This includes any benefits paid to your spouse or children, as well as any money withheld for Medicare premiums, taxes and garnishments.
Considerations: This option is typically used if you started receiving benefits early and then decided to delay them to increase your future payments.
Restarting Social Security Benefits
Once you have stopped your benefits, there are specific steps to restart them.
1. Resuming Suspended Benefits:
Process: You can request the SSA to resume your benefits at any time before you turn 70. If you do not request resumption by age 70, the SSA will automatically restart your benefits at the higher amount.
Impact: Resuming your benefits after a period of suspension means you will receive higher monthly payments due to the delayed retirement credits you earned.
2. Reapplying After Withdrawal:
Process: After repaying the benefits you received, you can reapply for Social Security benefits at a later date. This involves submitting a new application to the SSA.
Impact: Reapplying allows you to potentially receive higher monthly payments, especially if you have continued to work and increase your earnings record.
Important Considerations
Family Benefits: If you suspend your benefits, your spouse and children cannot collect family benefits on your work record during the suspension period. However, a divorced spouse receiving benefits on your work record will not be affected.
Spousal Benefits: You cannot collect spousal benefits if your own retirement payments are suspended.
Financial Planning: Stopping and restarting Social Security benefits should be part of a broader financial planning strategy. It is advisable to consult with a financial advisor to understand the long-term implications.
Conclusion
In conclusion, stopping and restarting Social Security benefits can be a strategic decision to maximize your retirement income. Understanding the processes and implications of voluntary suspension and withdrawal of benefits is crucial for making informed decisions. Always consider your personal financial situation and consult with professionals to ensure the best outcomes for your retirement planning.
