When will I see my Social Security retirement benefit increase after waiting to file?

When will I see my Social Security retirement benefit increase after waiting to file?

Hi Larry, if I don’t start receiving my Social Security retirement benefit at age 66 when I reach my full retirement age, how much will it increase? I could wait another year or more. Will I continue to receive increases if I wait one to two years or do I have to wait another full year after the first year to get more? Thanks Josh

Hi Josh, Delayed Retirement Credits (DRC) add 2/3 of 1% to a person’s benefit rate for each month it takes to collect Social Security retirement benefits after full retirement age (FRA) up to 70. That equates to an 8% increase for every year initial benefits are delayed.

However, if you apply for benefits between full retirement age (FRA) and age 70 in any month other than January, you will initially only receive credit for the late retirement credits (DRC) you earned through December of the prior year. Any remaining DRC accrued in the year you applied for benefits will be credited to your benefit payment for the following January.

For example, if a person reaches their FRA of 66 on 7/2020 but delays in starting their Social Security retirement benefits until 7/2021, their initial benefit rate would only include credit for six DRCs (i.e. from July to December 2020). In other words, your initial profit rate would only be 4% higher than your FRA rate, not 8%. The additional 4% increase for the months of January through June 2021 will not be credited until payment of the person’s benefits for the month of 1/2022. Also, I understand that the automated process used to credit additional DRCs only runs every two years, so it could be a while before that person actually sees an additional 4% increase. However, Social Security would pay any late payments once the recalculation was processed.

You may want to use my company’s software, Maximize My Social Security or MaxiFi Planner, to explore each of your possible presentation options and establish the best possible strategy to claim your benefits. Social Security calculators provided by other companies or nonprofits can provide adequate suggestions if they were built with extreme care. Better, Larry

Am I missing something?

Hi Larry: In my divorce settlement, the judge calculated that I will receive $ 2,000 from Social Security per month at age 62. I am forced to accept it at 62 as required by decree. My ex-husband has paid the maximum in the last 10 years. I will be 62 in 2028. And I am sure this Social Security at 62 for $ 2,000 combined with another $ 1,000 for my ex, who will receive at least $ 3,000 per month. Since this is all I can hope to live, this is quite important to me. I was completely dependent on him while I stayed at home to raise our children. It seems this just doesn’t sound right, that I’m going to get $ 2,000 a year at 62. Am I missing something? Thanks Deanna

Hi Deanna, all I can tell you is that the judge handling your divorce case cannot set the amount for which you will be eligible for Social Security. Social Security is a federal program, and the rates of benefits payable are determined by the earnings history of the worker on whose record benefits are paid.

The most that can be paid to a divorced spouse from a former living spouse’s record is 50% of the ex’s primary insurance amount (PIA), which is equal to the amount of the retirement age retirement benefit (FRA). And they would only get 50% full if they wait until full retirement age (FRA) to start drawing. If, instead, they start drawing at age 62, the amount of their divorced spouse would drop by as much as 35%.

The current maximum PIA for people reaching FRA in 2020 is $ 3,011. Therefore, the current maximum possible divorced spouse rate in FRA would be $ 1,505, which would drop to $ 978 for a divorced spouse whose FRA is 67 and who is filing 62.

Also, you cannot be paid your own Social Security retirement benefits and a full divorced spousal benefit. If you qualify for both benefits, you could only be paid essentially the higher of the two benefit rates, and your rate would be reduced if you file before the FRA. Better, Larry

If my wife applies for survivor benefits before coming to FRA, will the age benefit be reduced?

Hi Larry, I’m 71 and my wife is 58. I delayed paying my Social Security retirement benefit until I was 70 to maximize my benefit. I must die before my wife reaches FRA and applies for survivor benefit, will the benefit be reduced depending on her age? Alternatively, should I survive until my wife is 62, present and receive a reduced benefit, does that also lock her into a reduced survivor benefit when she dies? Thanks Héctor

Hi Hector, if you die before your wife reaches full retirement age (FRA) and she applies for widowhood benefits before FRA, then yes, your widow’s rate would be reduced by age. If she started getting the widow’s benefits at age 60, she would receive 71.5% of her full rate, but if it’s at least FRA when she starts receiving the widow’s benefits, she would get the full rate. If she starts drawing benefits from the widow between 60 and FRA, the closer she is to FRA when she starts drawing, the closer to 100% of the rate she would receive.

Presenting your own benefits at age 62 or spouse’s benefits would not compel your wife to receive a reduced survival rate. You could still get 100% of your benefit rate if you are at least FRA when you claim widowhood benefits. However, if your wife gets reduced spousal benefits and is not eligible for benefits on your own record, and if you die before the FRA reaches your spousal benefits would automatically be converted to survivor benefits and your rate would be reduced based on his age at age The moment of your death. Better, Larry

Can my wife and I file online?

Hi Larry, I am currently receiving spousal benefits from my wife, who filed when she was 66 years old. He is now 67 years old. I’m turning 70 in early August and want to claim my retirement benefits. We would also like her to receive spousal benefits based on my history. What we need to do? Can we do all of this online? Thanks Jack

Hi Jack, you may be able to apply for your benefits online, but your wife would have to apply for spousal benefits by calling Social Security. They can accept requests over the phone even if their offices are closed to the public due to the coronavirus.

The Social Security website claims that they are constantly expanding their online services, but one of the current limitations for filing online is whether a person is currently receiving benefits on their own Social Security record. Therefore, your wife will not be able to apply for spousal benefits online unless and until Social Security further expands his online capacity. Better, Larry

Can a wife return the benefits of her deceased husband and obtain a benefit greater than 70 years?

Hi Larry, if a husband claims benefits with an FRA of 66 while the wife is collecting her own retirement benefit and he dies six months later, can the wife choose to repay her payments, intending to take the husband’s increased benefit when she turns 70? Thank you Mary

Hello Mary, you cannot withdraw a deceased person’s claim after their benefits have started, so the wife in your question would not be able to undo her husband’s application, even if she returned the benefits they paid her. However, in any case, delayed retirement credits (DRC) cannot be accumulated after the death of a person, so it would not be advantageous to withdraw the husband’s claim in a case like this. Nor could the wife obtain a higher widowhood rate by waiting until she is 70 to apply.

Since her husband filed at full retirement age (FRA), this wife’s unreduced widowhood rate would be based on 100% of the deceased husband’s total retirement age rate, or the amount of the primary insurance (PIA) ). You would get that rate if you apply for your widow’s benefits at full retirement age (FRA) or any time after that. However, you wouldn’t get that full rate plus your own benefits, just the higher of the two benefit amounts. Better, Larry