Suspension of benefits and Delayed Retirement Credits
 

Just had an interesting experience asking SSA about "Delayed Retirement Credits," these are what you get if you apply for social security later than Full Retirement Age and run at about 8% per year. They also apply if you suspend your benefits for a while, again providing you are above FRA.

I talked to SSA twice today wanting to suspend my Social Security Benefits and was told that I could "withdraw," this is without them looking at my case at all. Withdrawal must be done within a year of receiving benefits and requires all benefits be repaid. When you apply again later it is as if you never received any benefits, you get a do over.

Two people from SSA both told me suspending benefits does not result in Delayed Retirement Credits and an increased later benefit. This is in direct contradiction to the SSA website : "If you have reached full retirement age, but are not yet age 70, you can ask us to suspend your retirement benefit payments. By doing this, you will earn delayed retirement credits for each month your benefits are suspended which will result in a higher benefit payment to you."

Anybody know what's is going on here? Am I mistaken about my definitions of "withdrawal" and "suspension" of benefits? My circumstances are that I applied for and received Social Security about 8 months early and have now reached full retirement age, so I should be able to suspend the benefits and receive more later.

Re: Suspension of benefits and Delayed Retirement Credits
 

My understanding is that there are three scenarios:

1. Delay taking SS for any period up to age 70, which provides a significant increase in benefit.

2. Within 12 months of first taking SS "withdraw" the application and repay everything that has been received. This means that you "start again" when you apply. This will then operate as per 1 above.

3. Taking SS and then "pausing" payments. This will have the same effect as 1 above from the date of pausing. It looks like this is the one that you want to pursue.

There are specific words here: withdraw and pause. I suspect some confusion arose if the discussion was around "suspending" although a competent SS advisor should have been able to ascertain precisely what was being envisaged.

Re: Suspension of benefits and Delayed Retirement Credits
 

My only comment here is to say that using the term 'withdraw' is a terrible choice of words in the context of a financial program! 'withdraw', when money is concerned, has a very obvious connotation of 'taking money out'.

I realize this is the term the SSA seems to have chosen, not the choice of you guys here ... but what a poor choice of terms! 'Backing out' or 'reversing' would seem to be more appropriate!

PS - reminds me of the equally terrible choice of terms 'Given Leave to Remain'. I would suggest 'permission' in place of 'leave', since 'leave' is the exact opposite of 'remain'!

Re: Suspension of benefits and Delayed Retirement Credits
 

Thanks for your replies. The official language seems to be "suspend": https://www.ssa.gov/benefits/retirem...r/suspend.html

My calls to SSA were after I sent a letter specifically asking for my benefits to be suspended. I received a reply with a withdrawal form and no other explanation. I have made an appointment, so I'll see how that goes.

Re: Suspension of benefits and Delayed Retirement Credits
 

Update:

I had my appointment with Social Security. The officer was friendly and helpful. I was able suspend my social security benefits and will receive Delayed Retirement Credits. The officer said she had only done this three times in the last five years. So, my best explanation as to why I effectively got three refusals (one letter and two phone calls) to do anything at all is that it is a pretty rare procedure.

For anyone contemplating suspending Social Security, the payback is that your benefits are increased by 8% per year of suspension, but of course you lose benefits in the meantime. For me, I won't break even until I am 81!! So, you have to expect to live a long time and expect Social Security to be still paying out. In my specific case, I am trying to lower my income and make larger Roth conversions as well.