Social Security: The Hidden Benefit for Single Retirees

Source: Social Security Administration.

Many people complain that Social Security has more benefits for married couples than it does for single people. And indeed there are many strategies couples can use to boost their total family benefits, though they rely on both spouses working together to produce the best possible outcome.

But one strategy that most people think of as being for couples can actually give singles some financial flexibility in their retirement as well. Meet the file-and-suspend strategy.

The basics of file-and-suspend
In general, the file-and-suspend strategy gives couples the flexibility to get some benefits immediately while boosting their total payouts from Social Security later. If you're married, you can generally claim Social Security benefits either by using your own earnings history or by claiming spousal benefits that are based on your spouse's work history.

To use the file-and-suspend strategy, you wait until you reach full retirement age. At that point, you can file for benefits based on your own work history. That's a necessary step in order for your spouse to claim spousal benefits. If you did nothing else, then you at that point would get regular Social Security benefits, and your spouse's benefits would be based on your spouse's age and your Social Security payment.

But to implement the file-and-suspend strategy, you then immediately suspend the benefits you're entitled to receive. That means you won't get monthly payments, even though your spouse will. But it does mean your own benefit will grow, entitling you to monthly payments that are as much as 32% larger if you wait until age 70 before you start receiving them.

File-and-suspend for singles
The primary advantage of file-and-suspend for couples is that it adds spousal benefits to the mix. But if you're not married, there are no spousal benefits, so it's fair to ask how file-and-suspend can be of use to singles.

The reason singles should consider a file-and-suspend strategy has to do with the way the Social Security Administration treats people who have suspended their benefits. Consider: If you expect to wait until age 70 to start taking Social Security and therefore don't file for benefits until then, then once you start receiving monthly payments, they'll be about 32% higher than they would have been if you'd taken them at normal retirement age. If you change your mind between ages 66 and 70, you can receive slightly smaller monthly payments at any time by filing for benefits at that point. What you can't get, though, is back payments for what you would have received under Social Security if you'd filed at age 66.

That's where the file-and-suspend strategy comes in. If you file for benefits at your normal retirement age of 66 but then immediately suspend them, then you'll have the option later to collect higher monthly payments when you decide to start taking them. But you also have another choice: You can collect a lump sum based on the total payments you would have received if you hadn't suspended your benefits.

Source: SSA Office of the Inspector General.

Showing you the money
For example, say your work history entitles you to $1,000 in monthly benefits at full retirement age, but you decide instead to wait until age 70. Your expectation is that you'll receive $1,320 per month at age 70 because of the additional delayed retirement credits you'll earn. As it turns out, though, you need money sooner than that, and you decide to take benefits at age 68.

If you didn't file and suspend, then your only option is to take benefits at age 68, with two years of delayed retirement credits boosting your monthly payment to $1,160. But if you did file and suspend, you'd have another option: collecting a lump sum equal to 24 months of the $1,000 payments you would have been entitled to at age 66 if you hadn't suspended your benefits. That's a total of $24,000.

There's a trade-off with this method, though. If you take the $24,000 lump sum, you don't get credit for having waited for your benefits. Therefore, going forward, you'll only get $1,000 monthly rather than $1,160. For many people, though, the lump sum is much more valuable, as it can get them out of an immediate financial problem.

Social Security is full of tricks like this, and it's important to know as many of them as you can. Even though file-and-suspend is mostly for married couples, singles can get some value out of this well-worn strategy, too.

Read/Post Comments (9) | Recommend This Article (14)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 02, 2014, at 10:47 AM, msnega wrote:

    So basically, if you really didn't need the money for, let's say two years, you could collect and invest it somewhere yourself, make a little more money and then start collecting.

  • Report this Comment On August 02, 2014, at 11:14 AM, reddwarfone wrote:

    What the government really wants people to do is delay collecting social security until age 70 in the hopes most of them will die by then. That way, the government gets to keep the social security payments. Don't fall for that garbage. You are smarter than that.

  • Report this Comment On August 02, 2014, at 2:49 PM, nzk91g wrote:

    They need to get rid of these stupid tricks. Social Security is going broke as it is. We don't need to accelerate the problem. Our children and grandchildren are going to need some benefits with the student loans they take on to get lower paying jobs than we had without the loans.

  • Report this Comment On August 02, 2014, at 2:54 PM, Mathman6577 wrote:

    You should ignore the advice of paid financial advisors (who are in it for themselves and not for you).

  • Report this Comment On August 02, 2014, at 5:44 PM, tonyatn wrote:

    Enjoying money is only as good as if you’re still alive and healthy to enjoy it. And taking it when you’re younger and healthy might be a better approach.

  • Report this Comment On August 02, 2014, at 10:25 PM, sciencedave wrote:

    This strategy for singles is not much of a benefit compared to the married spousal benefit.

  • Report this Comment On August 03, 2014, at 8:27 AM, SJLeftHand wrote:

    As I am in excellent health and as I probably will be doing Roth IRA conversions each year between ages 61 and 69, inclusive, I probably will be postponing my Social Security benefit payments until age 70.

  • Report this Comment On August 03, 2014, at 8:40 PM, tkell31 wrote:

    I will be collecting at 62 assuming I live that long. I will worry about my "loss" when I get to 76 and start "losing" money. Of course this all demands on our ponzi scheme economy still being roughly the same in 20 years.

  • Report this Comment On August 04, 2014, at 8:35 AM, gadfly1000 wrote:


    "Don't fall for that garbage. You are smarter than that. "

    Unfortunately, you're NOT smarter than that and you're writing garbage.

    EVERYBODY, on average, receives the same lifetime benefit.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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