Easy SS Question

[Packman]

I have tried to find out on the SSA website, and others, if there is some kind of "reward/penalty" to waiting until full retirement age to take SS. I know about the 7-8% per year stuff. But what about taking SS just a month or two prior to FRA? Would I collect less than the annual 7-8% divided by 12 if I took it a month early? Is the actual amount simply calculated on a monthly basis? The reason I'm asking has to do with taxes and calendar year planning. My FRA is 66 and 4 months, if that makes any difference.

 

[pb4uski]

Yes... they do it by month. Here is yours: https://www.ssa.gov/benefits/retirement/planner/1956.html

 

[Gumby]

IIRC the penalty for collecting early is on a monthly basis. Ie if you collect at 66yr 3 mos, you get dinged for 1/2 % or so.

 

[Rick0]

A summary from:
https://www.fool.com/retirement/2018/09/24/how-much-social-security-will-i-get-a-step-by-step.aspx
Assuming you know your Primary Insurance Amount (PIA)

If you do not claim Social Security retirement benefits at your full retirement age, then the effect on your monthly benefit will depend on how early or late you filed. Here's how your PIA will change based on when you claim benefits:

• If you claim Social Security no more than 36 months before your full retirement age, your benefit will be reduced by 0.56% per month you claimed early. That works out to 6.67% per year during the three years leading up to your full retirement age.
• If you claim Social Security more than 36 months before your full retirement age, your benefit will be reduced by 20% plus 0.42% per month beyond 36 months early (that's another 5% per year).
• If you claim Social Security after your full retirement age, your benefit will be permanently increased by 0.67% for every month you choose to delay. These benefit boosts are known as delayed-retirement credits.

 

[Packman]

Yes... they do it by month. Here is yours: https://www.ssa.gov/benefits/retirement/planner/1956.html

Thanks, that's exactly what I was looking for. Don't know why I couldn't find that. This forum is soooo helpful!

 

[urn2bfree]

Oblivious Investor website has a link to nifty SS calculator that will tell you which month is best and how different scenarios affect your benefit.

 

[Perryinva]

Yes, before FRA it is simple by the month math. After FRA, the delayed credits are only applied at the beginning of the calendar year. So there may be a larger lump sum you may be losing if you file at the wrong time of the year, depending on when your FRA calendar date is.

 

[Time2]

Yes... they do it by month. Here is yours: https://www.ssa.gov/benefits/retirement/planner/1956.html

Why couldn't the eztend those charts to 70 years old.

 

[pb4uski]

They could.... but they didn't.

 

[Sarah S]

Yes they did. Pick your birth year here https://www.ssa.gov/benefits/retirement/planner/delayret.html

 

[gregable]

Yep, as mentioned earlier, the increase after Normal Retirement Age until 79 is 8% per year. This works out to 8% / 12 = 2/3 % per month.

There is a useful calculator at https://ssa.tools/ that will show you this graphically for your PIA and any starting date you want to select.

 

[pb4uski]

Good to know.... never seen that page before... cool.

To bad they didn't integrate the two pages together to cover 62 to 70 based on your birth year.