The Social Security ‘Pause Button’ Retirees Can Use After Full Retirement Age
Learn how suspending Social Security benefits after reaching full retirement age can increase your future payments and enhance your retirement income.
Short Answer: After reaching your full retirement age (FRA), you can choose to suspend your Social Security benefits, effectively hitting a 'pause button' that allows your future monthly payments to grow by up to 8% annually plus inflation adjustments.
How the Social Security Pause Works
Once you reach your FRA, Social Security lets you temporarily stop receiving benefits. During this suspension, your benefit amount increases by roughly 8% each year you delay restarting payments. This boost continues to compound until you resume benefits, resulting in a higher monthly income for the rest of your life.
Why Consider Suspending Benefits?
- Increase future payments: Each year of suspension after FRA adds an 8% increase to your benefit amount.
- Inflation protection: Cost-of-living adjustments (COLA) continue to apply, further growing your benefits.
- Flexibility: You can restart benefits at any time, tailoring income to your needs.
Example Scenario
Imagine your full retirement age benefit is $1,500 per month. If you suspend benefits for one year after FRA, your new monthly benefit when you restart would be approximately $1,620 (an 8% increase). If you wait two years, it grows to about $1,750 per month, plus any inflation adjustments during that time.
Alternatives and Next Steps
- Claim benefits at FRA: Start receiving payments immediately without any suspension.
- Delay benefits before FRA: Benefits increase by about 8% per year up to age 70, but this is different from suspending after FRA.
- Consult with a financial planner: To determine the best strategy based on your health, financial needs, and retirement goals.
Bottom Line
Suspending Social Security benefits after reaching full retirement age is a powerful tool to boost your future income. By temporarily pausing payments, you can increase your monthly benefit by about 8% annually plus inflation, providing greater financial security during retirement. Understanding this option helps you make informed decisions about when and how to claim your Social Security benefits.
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