Hello,
I will be 67 and 7 months in a few days. I am single, never married, still working, no dependents. I am on Medicare, but have not yet filed for Social Security.
I plan to keep working until at least 70.
I understand that I can claim, suspend, then restart benefits. If I do that now, I think I can collect 6 months in a lump sum, is that right? If at all possible, I would like to avoid collecting a check for even one month. I’m interested in the lump sum alone.
From reading, it seems like I will end up sacrificing about 4% of my benefit for the rest of my life is that right?
If I start the process now, in January, is the lump sum calculated at the newly increased rate or does it go by what it had been before the new cost of living adjustment?
When I file, do I suspend my benefits the same day or do I wait a few days?
Getting the steps exactly right is my primary concern.
Thank you!
Hi. You can claim retroactive benefits for up to 6 months prior to the month of your application, but you can't then suspend them until the month after the month you make the request for suspension. So, for example, if you file an application in January 2023 you can claim benefits starting as early as July 2022. You could also request to voluntarily suspend your benefits by adding a remark to that effect on your application, but the earliest month that your benefits could then be suspended would be February 2023.
The only way that you could apply for benefits and collect exactly 6 months of benefits would be to only claim 5 months of retroactive benefits and then request suspension of your benefits effective with the month after the month of your application. You'd then be paid for the 5 retroactive months plus your application month. And, yes, if you collect 6 months of benefits you'll lose the 4% benefit increase that you could have earned from delayed retirement credits (DRC) for those months.
The benefit rate that you'd be paid per month for any retroactive months would be the rate in effect for those months. Therefore, if you file now and claim retroactive benefits, the 2023 8.7% cost of living (COLA) increase won't be added to benefits payable for months prior to December 2022.
Furthermore, if you start drawing benefits between FRA and age 70, Social Security initially only gives you credit for any delayed retirement credits (DRC) that you earned through December of the year prior to your initial month of benefit entitlement. Any DRCs earned in the your initial year of entitlement are subsequently credited effective with your payment for January of the year after the year you elected to start your benefits. In other words, if you claim benefits retroactive to 2022, your benefit rate for months in 2022 will only include the DRCs you earned through December 2021. The DRCs you accrued for months in 2022 prior to your initial month of entitlement couldn't be credited to your benefit rate until your benefit payment due for January 2023.
Before filing for benefits, you should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully compare and analyze all of your options so that you can be sure to choose the best possible strategy for maximizing your benefits.
Best, Jerry
