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from 62 to fra when you file you get every penny of credit you earned that year up to filing . so if you are 62 in january and file at 62 -1/2 in july you are paid going forward as 62-1/2 . your benefit reflects every penny you earned delaying those 6 months .
that is not how it works from fra to 70 , checks are only increased once a year in january only .any credits you earn over the course of the year after january are added to your check the following january going forward . you actually can go 11 months at an older benefit rate if you file in feb .
so lets suppose you are 69 and file in july at 69-1/2 . you will get checks initially based on a rate based on the past jan 1 when you were first 69 . so your benefit will based on age 69 not the 69-1/2 you are . you will get that 6 month difference added starting in january of the following year and will be paid going forward based on 69-1/2 .
but you will not be compensated for the extra 6 months from jan to july that you only got paid as if you were age 69 not 69-1/2
so what you never get is the additional money added to those checks you already got in july ,aug,sept ,oct ,nov dec when you were paid at an age 69 benefit rate and not the 69-1/2 you actually were when you filed .
that money is simply never seen going backwards . you only get credit going forward .
follow that now ?
forbes explains it :
Question: If my full retirement age is age 66 and I delay beginning benefits, it is my understanding that the benefit increases 8 percent per year up to age 70. Is this increase factored in on an annual basis or on a pro-rata per month basis?
Answer: It’s a pro-rate monthly basis. But you have to wait until January 1 of the next year to receive this year’s delayed retirement credits. This means that if you forgo benefits in January and start them up again in February, you’ll need to wait for 11 months to collect a higher monthly check. But if you forgo benefits in December and start them up again in January, you’ll get a higher check in January. Yet another nasty Social Security gotcha!
so you see you do get the correct higher check going forward but you never are paid retroactive for the checks you got at the lower rate that you got over the course of the year .
to get every penny due you and not lose anything file for a check in january only .
Last edited by mathjak107; 09-25-2016 at 05:14 PM..
it really does not matter . before 70 , for every month you wait trying to get to january you are still growing a bigger benefit delaying anyway .
lets say your birthday was in december and you filed in feb. instead of jan . you would get credit for delaying an extra month but you would get the january rate until 11 months later when you would be increased in january to include that extra month going forward . but you would never see that 1 month increase on the 11 months that elapsed . if you waited until the following january to get that check you would get a years extra delayed credit and also get everything you earned over the past year .
this is one of those things ss does not tell you . they just tell you delayed credits you earned are given to you going forward in january of the following year .
they never make it clear to you that if you take a check before january any checks you already got are never reimbursed the difference .
when i asked this question at the ss office the clerks were clueless . they had to get a higher up to explain it to them .
Last edited by mathjak107; 09-25-2016 at 05:28 PM..
mathjack, you confound many things. "rate" in your mind is the payout rate for a particular benefit calculation. (a curious use of the term). Yes, SSA calculates payouts based on a formula reset once per year, based on the CPI (unless inflation is low like last year).
Your talk about benefit calculated after FRA is just plain wrong. I can guarantee it. I worked past FRA. They paid me promptly what I was due. I even got more since my last two months of working raised my benefit which they used to adjust my due when they got the income reported.
I'll not debate you on this anymore, since it is obvious you are set in your ways.
It would be nice, though, if you could cite SSA guidance that explains how you mis-understood.
sorry you don't follow but what i described is fact and the way it works .
When you file for benefits after delaying past fra , these credits are applied to your PIA. The payment of your credits is not immediate, though. Delay credits are added to your benefit only at the beginning of a new year , only the year you turn 70 is the exception .
"For example, Janice was born on September 14, 1949, so she will turn age 66 on September 14, 2015. Janice’s PIA is $1,000. Social Security considers Janice to have reached FRA on October 1, 2015. Janice intends to delay filing for her Social Security benefits until her 68th birthday in order to accrue 16% increase to her benefits.
So upon reaching her 68th birthday, Janice contacts SSA and files for her benefit to begin in October, 2017. Beginning in October, Janice will receive a benefit that is equal to her PIA plus 10%, a total of $1,100 per month. She will receive this benefit for October, November, and December of that year.
Then beginning in January, Janice will receive an increase up to the full amount of delay credits, 16%, for a total benefit of $1,160 per month. Janice will continue to receive this benefit for the remainder of her life, unless at some point in the future she becomes eligible for a Spousal or Survivor Benefit that is greater than her own benefit."
what janice will not ever get is reimbursed for oct,nov ,dec where she got the lower benefit check . she only gets the higher rate after january on new checks .
had she waited until january all her months would have been paid at the higher rate , not just the ones in the new year . they never go , well you got less in oct nov and dec so here is for those months you were short .
nope ,you never get that , you only get the new rate which includes all your drc on new checks starting in the new year .
Sorry bigbear99 but you are incorrect and Matt is correct, but he's making it sound like its a huge amount. It is not, BUT you are indeed missing some of your DRC credit for those months before Jan. It is clearly spelled out on the SSA site, though I don't have the link currently. If your FRA is 66 and your birthday is in Feb and you file in November of the year you turned 69 (figuring, heck, I'm only 2 or 3 months shy of 70, CLOSE ENOUGH), for December, (your first check) you will only get the amount based on 35 months of DRCs, (the number of months past your 66th birthday through Jan 1 of the year you turned 69) NOT the 45 months you actuaqlly delayed for...until Jan's check, where it is recalculated and you get full credit. But the 10 months DRC increase that you SHOULD be entitled to for Decembers check is indeed gone forever. Even if you were to get the max SS, it would be about $200 for that month. But that is an extreme example, and one month missed is always the max/mo. The more months "missed" the less the amount per month it is. I think last year, when this was brought up before, I figured out the most that would be "lost" is about $250. And that requires the max amount of SS paid out, and a mid year birthday, IIRC. For the average SS recipient that happened to work until 70 (rare), total loss was under $100.
Last edited by Perryinva; 09-26-2016 at 09:52 AM..
Simultaneously posting. So in the Janice example. She's "lost" 3x60=$180. However, those have always been the rules, so she didn't lose it really. It SEEMS she should be entitled to it, but the reality is, the 8% rate increase takes that in to account, and is why percentages after FRA are all calculated on the FRA amount going forward. There are many many "maximise my SS" we sites that discuss this very thing. Just google "when are Delayed Retirement Credits applied". A bunch pop up instantly. It seems wrong because DRCs are earned monthly, but applied yearly. It's not much different than someone whis birthday is the 2nd of the month having to wait almost an entire month more than someone who's birthday is the last day of the same month.
As far as worst loss, that may be right, but its spliting hairs. In my example. Losing it for one month results in (10/12) x 8%/yr DRC x 1 month = .067 or 6.7% of the total yearly increase. In a one months DRC lost for 11 months, it is (1/12) x 8%/yr DRC X 11 months = .073 or 7.3%. Big whoop, just enjoy the guaranteed raise in Jan, that you would get regardless of a COLA increase or not !!
My bday is early Feb, so a Jan filing is perfect for me.
Last edited by Perryinva; 09-26-2016 at 10:10 AM..
mathjak107, AnyPIA (SSA Calculator) awards the 8% in January of the following year as you have been explaining. The only exception according to the calculator is when the claim is made at age 70. Then it awards the last increment (Jan through birthday month) at whatever time of year the birthday falls. So the first benefit payment at age 70 has the full 1.32 factor.
So, as you said, if your birthday were, say, July 10, 1948 and you claimed in July 2014 at FRA, the factor is 1.0. So the benefit is 1.0*(FRA benefit). If you waited until October (a quarter of a year after FRA) to claim, the benefit initially is 1.0*(FRA benefit). It is this amount until January 01, 2015 (the year after FRA) when the 3 months (a quarter of a year) from the year before are applied and the factor becomes 1.020 (a quarter of 8%).
I've never seen someone who made a claim in the middle of the FRA-70 period join these conversations and share the actual experience but the calculator says you wait until January for all deferred years except the last one when you turn 70.
But I do have a motive for interrupting your conversation only to agree and not add. While I was gathering data I decided to have the calculator show the survivor benefit as including the delay but I could find no way in survivor mode of telling the calculator that the dead spouse had delayed collecting benefits so, no matter what I tried, the aged widower benefit always maintained a 1.00 factor. Do you know what I am doing wrong. If the now dead spouse never filed and died on his 70th birthday, shouldn't the aged widow factor be 1.32?
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