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SS a little "early"
Old 03-04-2017, 02:16 PM   #1
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SS a little "early"

Haven't been able to find a definitive answer to this:

I turn 70 in July of 2018, and have been holding out until then to claim SS. But if I claim, say, in January, how much of a hit will I take? The ss calculator tells me the answer for different yearly ages, but not for months, e.g. 69 yrs +6 mos.
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Old 03-04-2017, 02:20 PM   #2
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https://www.ssa.gov/planners/retire/1943-delay.html
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Old 03-04-2017, 02:22 PM   #3
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The annual increase is 8% after reaching your FRA, and it's calculated monthly so if you take it 6 months early it's a 4% reduction from your age 70 benefit.
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Old 03-04-2017, 02:28 PM   #4
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Got it, thanks.
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Old 03-04-2017, 02:29 PM   #5
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Watch out when claiming that you actually get what you intended. Some SS offices are reported to sign 70 year olds up as if they had filed at age 69.5 and pay 6 months arrears of (slightly reduced) payments in a lump sum, but lock you into the 69.5 age payment instead of the age 70 payment. Apparently many people like the lump sum, but if that's not what you want be careful you don't get signed up for it my mistake.
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Old 03-04-2017, 03:30 PM   #6
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Watch out when claiming that you actually get what you intended. Some SS offices are reported to sign 70 year olds up as if they had filed at age 69.5 and pay 6 months arrears of (slightly reduced) payments in a lump sum, but lock you into the 69.5 age payment instead of the age 70 payment.
Yes, I was offered that option. I refused. This was after I'd applied on line; someone from the local SS office called. It could be standard SS operating procedure, I suppose.
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Old 03-05-2017, 12:56 AM   #7
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They stupidly think everyone must love getting a "bonus"
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Old 03-05-2017, 07:36 AM   #8
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Watch out when claiming that you actually get what you intended. Some SS offices are reported to sign 70 year olds up as if they had filed at age 69.5 and pay 6 months arrears of (slightly reduced) payments in a lump sum, but lock you into the 69.5 age payment instead of the age 70 payment. Apparently many people like the lump sum, but if that's not what you want be careful you don't get signed up for it my mistake.
So if you wait till 70.5, do they give you a lump sum of six months in arrears of age 70 payments?
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Old 03-05-2017, 11:26 AM   #9
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I turn 70 in Sept this year. I took my SS starting Jan 1, 17--there was about a $30-40/mon "penalty" in the monthly rate BUT receiving over $3000 per months for 9 months more than offset.
Edit to Add: Furthermore, starting Jan 1 gives you the full annual benefit in your monthly vs. starting later in the year, when you loose the annual adjustment until the following year. Of course, the inflation adjuster this year was nada to 'write home" about.
YMMV
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Old 03-05-2017, 11:47 AM   #10
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What is it with the wording "By April 1 of the year following the year you become age 70"

Isn't that the year you become age 71? Then why don't they just say so?

I guess the "half year" approach avoids someone having to make a full RMD when they were only at that age for less than 6 months, could be just a day? Why not just prorate it for x/365? Or forget about it - everyone who reaches age X needs to take an RMD, what difference does it really make? They don't make those sorts if adjustments for voting ages, driving license, etc.

Just seems like they love to make the wording more difficult than needed.

-ERD50
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Old 03-05-2017, 11:56 AM   #11
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Watch out when claiming that you actually get what you intended. Some SS offices are reported to sign 70 year olds up as if they had filed at age 69.5 and pay 6 months arrears of (slightly reduced) payments in a lump sum, but lock you into the 69.5 age payment instead of the age 70 payment. Apparently many people like the lump sum, but if that's not what you want be careful you don't get signed up for it my mistake.
My SS "professional" pushed this option pretty hard but I don't understand why. I would think SS would rather we wait, since there is that small but not vanishingly small possibility that we could die in the mean time. Of course, DW would then collect, but still... One thing that seemed a bit disingenuous was that the rep made it sound like there was no cost (or, more to the point, she did not point out that there would be the cost of lower payments from then until I croak.) She did say what I would receive monthly from then on, but did not compare it to the amount I would collect by waiting until 70. I knew that there would be a cost, but only because I have a rudimentary understanding of how SS works. As it turns out, I did start as of Jan this year instead of waiting until my birth month. Only a month or two early, depending on when the correct Wednesday (or some such) falls. Don't think a percent or so will be a big deal, and it makes tax planning easier for my addled brain. YMMV
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Old 03-05-2017, 12:05 PM   #12
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They stupidly think everyone must love getting a "bonus"
Not unreasonable if you consider that most people love getting a refund when they file their income taxes.
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Old 03-05-2017, 01:11 PM   #13
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Originally Posted by ERD50 View Post
What is it with the wording "By April 1 of the year following the year you become age 70"

Isn't that the year you become age 71? Then why don't they just say so?

I guess the "half year" approach avoids someone having to make a full RMD when they were only at that age for less than 6 months, could be just a day? Why not just prorate it for x/365? Or forget about it - everyone who reaches age X needs to take an RMD, what difference does it really make? They don't make those sorts if adjustments for voting ages, driving license, etc.

Just seems like they love to make the wording more difficult than needed.

-ERD50
I didn't read what you read but by the sound of your question, I think you're confusing the rules for the "beginning" RMD. Your very first RMD can be delayed to the year after you turn 70 1/2, as long as you take it by April 1st. In other words, you must take 2 RMDs that second year if you choose that option. It that what you were asking?
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Old 03-05-2017, 02:13 PM   #14
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So if you wait till 70.5, do they give you a lump sum of six months in arrears of age 70 payments?
No.
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Old 03-05-2017, 04:18 PM   #15
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Edit to Add: Furthermore, starting Jan 1 gives you the full annual benefit in your monthly vs. starting later in the year, when you loose the annual adjustment until the following year. Of course, the inflation adjuster this year was nada to 'write home" about.
YMMV
This doesn't apply if you wait until 70. You get the full amount regardless of what month you turn 70.
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