In the US, Social Security is an important program that gives people money when they retire. However, some people do not know that these benefits can be briefly stopped. If you want to raise your monthly payments in the future, this choice could be good for you.
For instance, you can start getting benefits as early as age 62, but the amounts will be less than if you waited until your full retiring age, which is usually 67.
Your monthly benefits will be at their highest if you wait even longer, until you turn 70. Of course, waiting that long can be hard, but if your finances change, you might want to think about stopping your benefits.
What does it mean to suspend your Social Security benefits?
This choice might be especially appealing if you start getting Social Security and then get another source of income, like a new job, a gift, or some other unexpected boost in cash flow. You can get more money when you start getting benefits again if you stop getting them for a while.
Not everyone who gets Social Security can choose to stop getting it. To be qualified, you must be at least 67 years old, which is the full retirement age for most people right now.
If you started getting benefits before this age, you will have to wait until you reach it before asking for them to be stopped.
There is one exception, though, for people who have been getting assistance for less than a year. If this sounds like you, you can take back your initial claim for benefits, which will stop payments. What is the catch? Any rewards you have gotten up to that point will have to be paid back.
How to suspend your Social Security benefits
To stop getting Social Security payments, the process is easy and does not require a lot of paperwork. You can ask for this in three main ways:
- By phone: Call the Social Security Administration straight away.
- In person: Go to the Social Security office in your area.
- In writing: Make a written request to the people in charge.
As long as you are not waiting for approval for a new benefit claim at the same time, the suspension will start the month after your request is completed.
The benefits will not start again until you ask for them to or until the month before you turn 70, whichever comes first.
You can sometimes ask for the suspension of your benefits ahead of time. That being said, the ban can not begin before:
- The month after you asked for it.
- The age at which you can fully retire.
- If this is your first time applying for benefits, this is the month you can get them.
Potential drawbacks of suspending benefits
Putting a hold on your Social Security income can be a good way to get more money in the future, but it also has some bad effects. Depending on your situation, you may have to deal with some major problems:
- If your partner or kids get benefits because of your work history, they will stop getting them when you stop getting your own. One person who will still get benefits based on your record is your ex-spouse; those payments will not be impacted.
- Also, if you are getting benefits based on someone else’s record, those payments will stop.
- If you are getting help from programs like Supplemental Security Income (SSI), stopping your benefits could make it harder for you to get those programs again until your Social Security checks start up again.
Impact on Medicare Part B
Another important thing to think about is how stopping your Social Security payments will affect your health insurance.
The premiums for Medicare Part B, which helps pay for outpatient medical costs, are usually taken straight out of your Social Security payments if you have it.
They will send you straight bills from the Centers for Medicare & Medicaid Services to cover your premiums once those payments are stopped.
Because of this change, you need to carefully plan your budget to make sure you do not miss any payments and lose your coverage.
Is suspending your benefits the right choice for you?
Your specific financial position will determine if you should stop getting Social Security benefits. If you have other ways to make money or do not need the money right now, stopping your benefits can be a great way to make more money in the long run.
But it is important to think about the bad things that could happen, especially if other people depend on benefits that are linked to your account.
Before making a choice, it is a good idea to talk to a financial adviser or go to the Social Security office to fully understand what will happen. You can take steps today that will help your financial safety in the years to come if you plan them carefully.