Social Security Application and the Recalculation at FRA

[sheehs1]

youbet: That sounds like a nightmare and your wife must have the patience of a saint.

I held for over an hour and 30 minutes just to get an answer to my K1 income question. I can't imagine having to do it every darn year, multiple times, etc.

[Rianne]

Quote:

Originally Posted by sheehs1 I decided to apply early for Social Security and did so last week. I am delaying payment until my 64th Birthday Month which is this April. This first payment will be May. The reasons that factored in to my applying "early" included longevity risks but more importantly that my actual earned income is right at what they allow before they start reducing the monthly check. A call to Social Security prior to my applying, confirmed they do not consider income from a K1(unless you are an employee and I no longer am), Interest or Dividends from Investments as Income for the purpose of calculating the monthly check, all of which are significant for me. I will worry about the tax hit later or at least start planning other tax strategies! So few exist today! The online application was a pleasant surprise. It's easy! I just got a call today from the Boston office that is processing my application. Yes, SSA notified me via email that I would receive this call from this specific office. Things I did not know but was pleasantly surprised to learn. They will automatically enroll me in Medicare Part A and B so I don't have to remember to enroll in Medicare. That was the pleasant part. I will have to enroll in my own Part D and any supplemental. I also learned and for me this is the important piece of this post, because I asked the question after reading about it, that while I am taking Social Security before my FRA, which is 66 and 2 months, they will recalculate my payment when I turn 66 and 2 months and the payment will be increased to what is currently reflected on my statement for a Full Retirement Age payment (plus cost of living adjustments and credits for continued work). For some reason I guess I thought my early social security payment at age 64 would be the same thru out the years with only cost of living adjustments. Learning that it will be recalculated and will increase at 66 and 2 months makes me feel even better about taking it at age 64!

Our CPA told us this also happened with him/DW. He was not expecting the increase, but they reimbursed him for years lost and his SS was brought to FRA amount. Maybe it depends on the SS agent you talk to? Can they adjust at will?

[Dreamer]

Quote:

Originally Posted by youbet For example, my DW spends dozens of hours with SS folks either on the phone or at the local office each year. Her monthly check is less than her Part B premium so she must be billed the difference. (They take all of her check and bill her for the amount the check doesn't cover.) They really struggle to do this.

You have me worried now. This is my exact situation. Last year was my first year starting Medicare in March. They did withhold all of my social security checks and billed me the difference. Worked fine. I have not heard from them this year and was wondering when I will receive my bill. I hope that I don't have the problems that your poor DW does.

[sheehs1]

Quote:

Originally Posted by Rianne Our CPA told us this also happened with him/DW. He was not expecting the increase, but they reimbursed him for years lost and his SS was brought to FRA amount. Maybe it depends on the SS agent you talk to? Can they adjust at will?

Rianne, I have no clue if it depends on the agent spoken with or if they can adjust at will.
Perhaps if there are others part of our community here that filed early and experienced a recalculation at FRA they can weigh in regarding reasons and significance.

[DoHowv]

Here is a Code of Federal Regulations resource that will help answer your questions:

https://www.ssa.gov/OP_Home/cfr20/404/404-0000.htm

Especially pay attention to 404.430 ~404.450 that pertain to Earning Tests and Grace Year and Self employment. Research Grace Year as it determines whether your exempt earnings are calculated on a monthly or annual basis. Basically MET (monthly earning test) is only used in your Grace Year and AET (annual earnings test) is used in other years. If your FRA is your Grace Year than you are subject to a monthly amount calculated by the months preceding your birth month. If your FRA is after your Grace Year the AET applies.

I don’t know how you K1 figures into this.

Here are other Usful resource:

https://secure.ssa.gov/poms.nsf/lnx/0302501025#b

https://secure.ssa.gov/apps10/poms.n...ttocategory=03

As others have said do not rely on answers from SSA agents as you will get different answers from each agent.