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Wilmington NC CPA discusses the Claim and Suspend Social Security Strategy for Single Folks

cpa wilmington nc

Gary Bode, CPA: if you don't already have a proactive CPA, give us a call for a free phone consult at 399-2705.

CPAs get asked lots of questions about retirement planning. Social Security is a part of that scenario. Much has been published on the “claim and suspend” Social Security strategy for married folks. But it is no-lose scenario for single people.

Claim and Suspend

This means you apply for Social Security but elect not to be paid as yet. No, this isn’t always crazy.

Full Retirement Age

While you can receive reduced Social Security benefits at age 62, the strategy below uses the full retirement age of 66. Note that the full retirement age is creeping up and will be 67 soon.

The Strategy for Single Folks

Apply for Social Security at full retirement age and then suspend payments. By doing so, your monthly benefit grows by around 8% for every year of continued suspended payments. This is just standard Social Security planning up to now. But here’s the cool part. If you run into financial problems, you can claim all those accumulated, suspended Social Security payments in one lump sum! The cons? There is no interest paid on the lump sum and you lose the delayed retirement benefits. Income taxes should be considered on the timing of the lump sum payment. Ideally, you would want little or no additional income for that tax year.

We’re a Wilmington NC CPA firm with a virtual office that serves a broad geographical base. Please read any of our hundreds of posts on this website to get a feel for what we do and how we do it. If you don’t already have a proactive CPA, give us a call at (910) 399-2705 for a free phone consult.

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