Can someone help me understand these SSA estimates?

[Ready]

I was under the impression that from 67-70 my annual benefit goes up an even 8% each year but my latest statement shows these figures. Does this make sense? There is almost no increase from 67-68, a more modest increase from 68-69, then a huge jump from 69-70. This was pulled off of my current SSA online statement.

 

[Gumby]

That is weird. I do note that if you compare the Age 70 amount to the Age 67 amount, it is 24% higher, which is as it should be.

 

[ERD50]

Is there any assumption of future income? -ERD50

 

[Gumby]

Here is the Social Security Administration document explaining the adjustment for late benefits. The sample graph goes up evenly as you would expect.

https://www.ssa.gov/pubs/EN-05-10147.pdf

 

[finnski1]

That is weird. I do note that if you compare the Age 70 amount to the Age 67 amount, it is 24% higher, which is as it should be.

DW's and my latest statements do something similar to the OP but catch up and look correct at age 70.

 

[Ready]

Is there any assumption of future income? -ERD50

The assumption is zero because I haven’t worked for four years.

 

[cathy63]

I think your FRA is 67, right? I wonder if the age 68 and 69 calcs are for Jan 1 for that year rather than your actual birth month. If your birthday is late in the year that would give a really tiny bump between 67 and 68.

My birthday is in January and here's my graph, which shows an even rise of $248/$249 for each year.

It's just a guess, but that's the only thing I can think of that might explain it.

 

[anethum]

This old thread explains what you're seeing:

https://www.early-retirement.org/fo...t-ss-after-fra-but-before-age-70-a-73525.html

 

[Ready]

This old thread explains what you're seeing:

https://www.early-retirement.org/fo...t-ss-after-fra-but-before-age-70-a-73525.html

I can’t follow how this thread relates to my question. What am I missing? Are the numbers in my graph correct?

 

[latexman]

I can’t follow how this thread relates to my question. What am I missing? Are the numbers in my graph correct?

When's your birth month and year?

 

[Ready]

When's your birth month and year?

11/66

 

[cathy63]

I can’t follow how this thread relates to my question. What am I missing? Are the numbers in my graph correct?

The other thread is saying that yes, your numbers are correct for someone born in November. It confirms my guess above that the calculations are done in January, not the month that you actually retire.

So if you claim any time during the year you turn 68, during that year you will only get credit for delaying two months. Any extra months are added on during the year you turn 69.

 

[Ready]

The other thread is saying that yes, your numbers are correct for someone born in November. It confirms my guess above that the calculations are done in January, not the month that you actually retire.

So if you claim any time during the year you turn 68, during that year you will only get credit for delaying two months. Any extra months are added on during the year you turn 69.

OK, it’s starting to make sense. So if I wanted to claim at 68 I’m better off waiting two more months until January? Does this apply to being 69 as well?

For now my plan is to wait until 70 but I will reevaluate as I get closer.

 

[anethum]

I can’t follow how this thread relates to my question. What am I missing? Are the numbers in my graph correct?

What the other thread explains is that there's a quirk in initial Social Security payments if someone starts collecting S.S. after they've reached FRA but before they reach age 70. After reaching FRA, you accrue a Delayed Retirement Credit for each month you delay in claiming benefits. However, after reaching FRA, those accrued monthly increases are not applied until January of the following year. There is no retroactive lump sum payment for the benefits lost in the calendar year you begin receiving S.S. If you start collecting in any January, there won't yet be any monthly accruals for the year so you won't lose anything.

 

[5Miler]

Just another data point for reference, if you have Delayed Retirement Credits for a partial year you may find SS does not necessarily update payment amounts in January as you might think.

I started SS in November last year, 2021 with my first payment received in December. The amount was just as I calculated using the Social Security Calculator web site and my own longhand calculations. In January I received my COLA increase and again the amount received matched my calculations just about to the penny.

In February I should have received an additional increase to account for my Delayed Retirement Credits for the 10 months delay from January 2021 to November 2021 but no such increase was received. To clarify, I am not expecting back payments for this, just the monthly increase effective with the Feb payment. I looked into it and found that the process by SS to calculate the Delayed Retirement Credits can be run anytime during the year so it could be quite a while before I realize the increased payments although back payments will be made but of course only back to February of this year. Who knew? Certainly not me.

I double checked my calculations with the Social Security Calculator web site and come up with the same numbers for my expected payments at 68 years and 5 months. It is a $165 a month difference. I believe if I had started collecting in January, this delay would not happen.

 

[Ready]

I think I understand this but just to clarify, if I wait until 70 to claim SS but claim it on my birthday in November, I should get the full amount and therefore should not need to wait until January of the following year to file, right?

 

[xlf11]

I can confirm that I applied SSB starting 11/2021 as well just Like 5Miler's experience with my FRA in 5/2021. The only difference is I did received my delayed credit payment starting 1/2022 (payment this month). So it is starting Jan. with delayed credit, but I read many people did not receive it in Jan. rather later month (some listed with last year earning record not updated until mid year as a reason). I did not have a working record in 2021. Definitely if you start SSB at 70, it should be getting full delayed credit right away.

 

[Jerry1]

What the other thread explains is that there's a quirk in initial Social Security payments if someone starts collecting S.S. after they've reached FRA but before they reach age 70. After reaching FRA, you accrue a Delayed Retirement Credit for each month you delay in claiming benefits. However, after reaching FRA, those accrued monthly increases are not applied until January of the following year. There is no retroactive lump sum payment for the benefits lost in the calendar year you begin receiving S.S. If you start collecting in any January, there won't yet be any monthly accruals for the year so you won't lose anything.

This is good to know! This forum has help me in many areas of retirement and especially in financial areas. Thanks!

 

[5Miler]

I can confirm that I applied SSB starting 11/2021 as well just Like 5Miler's experience with my FRA in 5/2021. The only difference is I did received my delayed credit payment starting 1/2022 (payment this month). So it is starting Jan. with delayed credit, but I read many people did not receive it in Jan. rather later month (some listed with last year earning record not updated until mid year as a reason). I did not have a working record in 2021. Definitely if you start SSB at 70, it should be getting full delayed credit right away.

Interesting as I didn't have any earnings for last year either. Actually, no earnings for the past 10 years.

 

[azxracer]

When I was planning SS start date I used the PIA download tool from the SS website. I got similar results and couldn't understand why. I emailed the guy responsible for the PIA tool in the SS office (got his email from the website) and he explained these sort of arcane rules of SS that no one ever talks about. Like deferred credits.