Does it matter what month you take social security?

[MissMolly]

actually, ** NO **

if you read the POMS I cited, and it was shown that that WAS the correct situation in a Bogleheads thread by one of the contributors that wrote the program on when to apply for SS, if you apply in JAN, then the DRC's actually don't get credited until the NEXT YEAR !!
(note that it says the january AFTER you apply for benefits!!)

THAT'S why I'm planning on starting on either OCT/NOV of the year (just after FRA)... I'd get the DRC's credited in the new year (JAN...for FEB payment), get the inflation factor also credited in January.
(I've got the slightly lower PIA, but have been deferring for higher SS and to allow for Roth conversions.)

If you read the one I cited it says this:

"(c) When is the increase because of delayed retirement credits effective?—(1) Credits earned after entitlement and before the year of attainment of age 70. If you are entitled to benefits, we examine our records after the end of each calendar year to determine whether you have earned delayed retirement credits during the previous year for months when you were at or over full retirement age and you were fully insured and eligible for benefits but did not receive them. Any increase in your benefit amount is effective beginning with January of the year after the year the credits were earned."

So applying in to start in January would get you all your DRCs for the previous year.

 

[Irishgirlyc58]

Does it matter which month you apply if you are applying before FRA?
Do they factor in your last wages for the time previous to applying to determine what your FRA benefit would be?

 

[MissMolly]

Does it matter which month you apply if you are applying before FRA? - No
Do they factor in your last wages for the time previous to applying to determine what your FRA benefit would be?

- If your income tax return has been filed then they will factor in whatever is reported. They have no way of knowing what your wages are until then.

 

[FI_RElater]

If you read the one I cited it says this:

"(c) When is the increase because of delayed retirement credits effective?—(1) Credits earned after entitlement and before the year of attainment of age 70. If you are entitled to benefits, we examine our records after the end of each calendar year to determine whether you have earned delayed retirement credits during the previous year for months when you were at or over full retirement age and you were fully insured and eligible for benefits but did not receive them. Any increase in your benefit amount is effective beginning with January of the year after the year the credits were earned."

So applying in to start in January would get you all your DRCs for the previous year.

That would mean if Jan 2022 start, that the benefit amount starts in Jan of 2023 (that's why I seriously looked at that Boglehead thread and an earlier one that said the same... you'd lose some of the benefit... they don't "true up"....
If you started in NOV (or DEC) of 2021, that "next year" is 2022 and the credits start....hence I'll start in NOV just past FRA to have COL increase as well as DRC's for the JAN of following year...paid in FEB

edit: went to BH site; there's a thread there called "SS Delayed Credits Timing" that has an "Alan S" as well as "ObliviousInvestor" (aka, Mike Piper) who are experts on SS and claiming

 

[MissMolly]

That would mean if Jan 2022 start, that the benefit amount starts in Jan of 2023 (that's why I seriously looked at that Boglehead thread and an earlier one that said the same... you'd lose some of the benefit... they don't "true up"....
If you started in NOV (or DEC) of 2021, that "next year" is 2022 and the credits start....hence I'll start in NOV just past FRA to have COL increase as well as DRC's for the JAN of following year...paid in FEB

edit: went to BH site; there's a thread there called "SS Delayed Credits Timing" that has an "Alan S" as well as "ObliviousInvestor" (aka, Mike Piper) who are experts on SS and claiming

I am not talking about the benefits starting in January, I am talking about when DRCs were earned - the previous year which ends in December. You might want to go back and read that BH thread again. It supports what I am saying.

 

[springnr]

if you are talking to me, the difference isn't much (don't have my numbers in front of me)...

FI_RElater I meant to reply to the thread topic, and then had to go. Instead of deleting it looks like I hit enter on a place holder thought.

My guess is when congress and SS was working out SS law, computers weren't handy to make all the calculations. Choosing set things in stone once a year in January made life easier, saving SS a little money was just gravy.

When you chose to start matters because that sets your SS amount. After that you get inflation adjustments. If you choose January then there is nothing to see here. If you chose to start any other month then the first year you will lose out on .073333333 of the January amount the first year. (11 months of the 8%)

Start Jan 2001 $40,000 plus 8% Jan 2002 $43,200
Start Feb 2001 $40266.67 is locked in for next Jan. 266.67 X 11= $2933.37
Start Dec 2001 $42933.37 is locked in for next Jan. $2933.37


So it does matter going forward whether you start in Feb or Dec. It is just if you start other than the month of January you take a hit that the first year.

I could have this wrong, corrections appreciated. Too late for me as I started Jan 2001

 

[RetiredHappy]

Please help me understand this thread as I am confused. Let's say my birthday is in middle of Nov and I want to start SS at 62. Dec is my first full month. Should I file for SS to start in Dec, i.e. paid in Jan, or should I file for Jan and paid in Feb? I want to make sure COLA for the following year, i.e. in Jan is applied to the amount for the whole year.

 

[Sarah S]

I think up to and including the month you reach full retirement age it doesn’t matter what month you pick. That if you receiving a benefit the cola gets applied to that number each January. If you are waiting each January the cola gets applied and the amount you would get if starting any month will be increased by that percent from what was previously predicted. Is this correct? Delayed retirement credits don’t factor in. There is an opposite calculation that debits for taking early but the only once a year adjustment that happens with DRC doesn’t occur??

 

[Sunset]

^^^^^^^ So they don't work hard to get a person all the credits they deserve, but if it is a deduction, they calculate out right away how much less a person will get to avoid overpaying.

Seems to me, then need to fix the software to correctly give a person the DRC due regardless of the month of application.

That is why we have computers.

 

[Sarah S]

I am not completely sure I am correct. I am somewhat surprised if it works this way as they could do the same thing to the taking early group by only increasing the amount you actually get in January

 

[FI_RElater]

https://www.socialsecurityintelligence.com/the-delay-of-delayed-retirement-credits/

to your question; I'd have to reread it, (the BH thread...and much earlier one as well) and the POMS, since (very often) the start date (since it is in the new year... it's Jan ) causes the DRC's to get put into the new year (yeah, you do get the DRC's you earned, if any, within the period from FRA to DEC of the prior year)... (and that BH thread that I first heard of the issue is quite old)
[found this one: https://www.bogleheads.org/forum/viewtopic.php?t=270053 ]

If you look at that initial link, you see that in the example given that first year the payment is the same as if claiming in FEB (the FRA of the example) for the period until the next january when it goes to 4% higher such that the difference (4% of those early payments) for that first year is actually lost (forfeited) and there's no "true up" (hence the statement in the article "and no, you don't receive any payment to make up for those months that you missed"). When looking at the SS site itself it shows the same thing in my personal statement... the early payments would be exactly the FRA (no DRC added) until the Jan (for feb payment) where the DRC's are included (and no true up to account for the difference)
It's a bummer...and what makes me look at doing the start at Nov (or Dec)

Sarah... take a look at that BH link as it shows the magnitude that could be forfeited (see Alan S comments, as he's an expert; can't remember if "sscritic" also weighed in, but he's also an expert but doesn't post there anymore)

 

[springnr]

Oh jeez, I see a glaring error in my post from yesterday.
I'm a much better lurker than a poster! ; >)

I started this Jan 2021 and did not delve into this exact situation.
Corrections below which may not be exact but at least closer.
(Mods can delete my previous responses or all responses in this thread, as they could lead some one astray.)

FI_RElater I meant to reply to the thread topic, and then had to go. Instead of deleting it looks like I hit enter on a place holder thought.

My guess is when congress and SS was working out SS law, computers weren't handy to make all the calculations. Choosing set things in stone once a year in January made life easier, saving SS a little money was just gravy.
===================
Changes:
While accumulating DCRs when you chose to start matters as that sets your SS amount. After that you get cola adjustments. If you choose January then there is nothing to see here about DCRs.
If you chose to start any other month then Jan you will lose out a portion of the accumulated DCR amount above that January's yearly amount.

Start Jan 2001 $40,000.00 +8%--> (Start Jan 2002 $43,200.00)
Start Feb 2001 $40266.66 (266.66/12)=22.22x11 payments = 244.42
Start Jun 2001 $41333.33 (1333.33/12)=111.11x7 payments = 777.78
Start Jul 2001 $41600.33 (1600.33/12)=133,33x6 payments = 800.00
Start Aug 2001 $41866.66 (1866.66/12)=155.55x5 payments = 777.78
Start Dec 2001 $42933.26 (2933.26/12)=244.43x1 payments = 244.43

You will then start in Jan 2002 with the DCR amount you should have been receiving in the month you started +cola adjustment. Feb 2001 start = Jan 2002 40266.66 +cola

 

[RobbieB]

Good thread.

I'm past FRA and heading on. I think I'll claim in January of the year I turn 70.

Now collecting survivor benes, so no hurry.

 

[oldtimer]

Is my understanding of DRCs correct when it comes to claiming 6-month retroactive?

* born Jan'54 (not on the 1st)
* FRA = 66 in Jan'20
* apply for SS last week in Dec'21 to start benefits 6-month retroactive from Jan'22 back to Jul'21
* receive Jan'22 payment in Feb'22 = PIA + 18 months of DRCs
* receivein 2022 6-month retroactive lump sum payment = 6 * (PIA + 12 months of DRCs)


Trying to prevent any SS payment received in 2021 to allow maximum Roth conversion space.

 

[Sunset]

Is my understanding of DRCs correct when it comes to claiming 6-month retroactive?

* born Jan'54 (not on the 1st)
* FRA = 66 in Jan'20
* apply for SS last week in Dec'21 to start benefits 6-month retroactive from Jan'22 back to Jul'21
* receive Jan'22 payment in Feb'22 = PIA + 18 months of DRCs
* receivein 2022 6-month retroactive lump sum payment = 6 * (PIA + 12 months of DRCs)


Trying to prevent any SS payment received in 2021 to allow maximum Roth conversion space.

Why not simply claim starting benefits Jan 2022 get PIA + 1 , + 18 months of DRCs.

Doesn't sound like you really need the retroactive lump sum and the resultant lower SS payments for life.

 

[oldtimer]

Plan to fund a major family trip next year, so need to know if 6-month retroactive payment will cover the cost or need additional funds.

 

[pb4uski]

I turn 70 in November (not this November). Let's say my PIA is $1,000/mo at age 66... so my age 69 benefit would be $1,240 [$1,000 * (1+8%* (69-66)] and my age 70 benefit would be $1,320 [$1,000 * (1+8%* (70-66)].

So if I don't receive my benefits for November or December until after January of the following year, for November and December would I get $1,240 or $1,320 (ignoring COLAs). I think it would be $1,320, but if I apply earlier so my first check for November is paid in December, then for those two months I only get $1,240 and then my January benefit increases to $1,320.

Is that right?

 

[FI_RElater]

{see "supersharpie" 's comments in this Bogleheads thread: https://www.bogleheads.org/forum/viewtopic.php?t=357741}

it's also been an ongoing question for posters there...

(many on that forum are surprised... and I too had originally thought, back when I originally got my "retirement matrix" from SS (printed out in the SS local office) that whenever month I started that that number would be my initial payment ; so that's why I so remembered this info (brought forward by well regarded and extremely knowledgeable posters at that time)... it changed (slightly) when I expect to start SS )

 

[MissMolly]

I turn 70 in November (not this November). Let's say my PIA is $1,000/mo at age 66... so my age 69 benefit would be $1,240 [$1,000 * (1+8%* (69-66)] and my age 70 benefit would be $1,320 [$1,000 * (1+8%* (70-66)].

So if I don't receive my benefits for November or December until after January of the following year, for November and December would I get $1,240 or $1,320 (ignoring COLAs). I think it would be $1,320, but if I apply earlier so my first check for November is paid in December, then for those two months I only get $1,240 and then my January benefit increases to $1,320.

Is that right?

No. If you file at age 70 they don't hold back any DRCs. You get them all. It may take them a few months to catch it up (or so I've heard), but you get them all.

 

[Sarah S]

Am I correct in thinking you get the “ advertised” amount no matter what month you file for except for the period from full retirement age plus one month up to and including the month you turn 70- 1 month? My FRA is 10/2022 and I would be 70 6/2026 so if I decided to claim starting 11/2022 until 5/2026 that is the period affected? But if I claim any time between now up to and including 10/2022 the month I pick doesn’t matter ( other than the small monthly increase for waiting a little longer)?

 

[Calico]

Thank you Miss Molly!

I for one would like to send a big thank you to you, Miss Molly, for all the free, detailed advice you are generously providing.

I'm guessing you must have worked in the Social Security field at some point, given your depth of knowledge.

Your answers to other folks have actually provided clarity on a couple of points that were fuzzy for me, so thank you!

You might want to consider upping your "hourly rate."

 

[MissMolly]

I cannot follow your question. The simple answer is, if you file at anytime after your full retirement age and before you turn 70 AND you file in any month other than January, you do not get the DRCs for the year you file until the following January. So file in January, you get all the DRCs from the previous year. File in February, you get all the DRCs from the previous year but not January's of the year you file. File in March, you get all the DRCs from the previous year, but not January or February of the year you file. And so and so on.

 

[RunningBum]

So file in January, you get all the DRCs from the previous year.

So when you say "file in January" you mean "file to start collecting in January", right?

 

[Sarah S]

I cannot follow your question. The simple answer is, if you file at anytime after your full retirement age and before you turn 70 AND you file in any month other than January, you do not get the DRCs for the year you file until the following January. So file in January, you get all the DRCs from the previous year. File in February, you get all the DRCs from the previous year but not January's of the year you file. File in March, you get all the DRCs from the previous year, but not January or February of the year you file. And so and so on.

If it was my question that was unclear sorry. I was confirming this issue with only annual adjustments of credits doesn’t happen until you have passed FRA and ceases as soon as the month are 70. So if one files for the month they reach FRA or before then any month is ok and then it is ok the month you are 70 even if those things are midyear but starting the month after FRA and continuing until the month before you are 70 if filing for any of those months you should consider the potential for “ losing” drcs for that year when deciding when to claim

Thanks again

 

[MissMolly]

So when you say "file in January" you mean "file to start collecting in January", right?

No. File in January to start collecting in February. SS is paid in arrears. The check you receive in February is for the January benefit.