Ask Rusty – I’m Reevaluating My Retirement Plan; What are my Options?

Dear Reevaluating Retirement:  I’m assuming you asked for your Socal Security benefits to start in September (when you originally planned to retire), but that you won’t be 70 years old until March 2027. If that is correct, be aware that you will not immediately get all of your earned Delayed Retirement Credits (DRCs) when your benefits start in September – you will only initially get the DRCs you have earned through the end of 2025. That’s because Social Security usually applies DRCs in January of each year. So, what will happen is that your September benefit amount will lack the 5.3% DRCs you earned in 2026, until January 2027 when they will apply the DRCs earned in 2026 to your monthly payment amount. Said simply, your initial September benefit will not include your full age 69.5 entitlement because it won’t include the 5.3% extra you earned in 2026.  That extra monthly amount will be awarded in January 2027.  FYI, if you were to, instead, claim for your SS benefits to start in the month you turn 70 (March 2027), you would get your full age 70 amount immediately (SS awards all earned DRCs if benefits are claimed to start in the month you turn 70).

Now, on to your question: Yes, if you take your benefits effective with September 2026 you can suspend your benefits, but you can only suspend them until the month you turn 70. And if you are suspending your benefits, you will not need to repay Social Security for any benefits you happen to receive before you suspend.  As is obvious, you will not receive any SS payments while your benefits are suspended, and you will earn DRCs for the months your benefits are suspended, resulting in a higher monthly amount at age 70.  Also, since you have already passed your SS full retirement age (FRA), you can work and earn as much as you like, without your Social Security benefits being negatively affected.

Regarding your comment “No Spousal benefits taken yet.” FYI, you cannot get spousal benefits while your benefits are suspended, nor can your wife get spousal benefits from you while you SS retirement benefits are suspended. To be clear, spouse benefits are only paid when one spouse’s benefit at their FRA is less than 50% of the other spouse’s FRA benefit.  Spouse benefits are always based upon FRA entitlements, not on the larger amounts which will result from waiting longer to claim. In other words, your wife would only be eligible for a spousal benefit from you if her FRA entitlement was less than 50% of your FRA entitlement (not your age 70 SS entitlement). And she cannot get a spousal benefit while your benefits are suspended.

To recap:  Yes, you can suspend receipt of your SS retirement benefits until the month you turn 70 and get credit for that delay (resulting in a higher benefit). And, yes, you can continue working as long as you wish, and your benefits will not be negatively affected. And just for added information, you can also ask Social Security to withdraw your current application for SS benefits and then reapply in January 2027 for your benefits to start in March 2027 (the month you turn 70). You have both options.