I have another question about delayed retirement credits. My FRA of 66 was in 2014. I do have RR but now have been given the exact amount of Social Security retirement. It is 271.00 higher than my tier 1 RR. Does Social Security pay back pay of the delayed retirement credit portion when I do start benefits or is all of that money basically forfeited? I do understand that they no longer pay the lump sum as of April of 2016 but was not sure if the portion of delayed credit might be given. Since I have applied, I am supposed to tell SS tomorrow if I want to start benefits or delay until a later age. Will I still be able to accrue DRC's as long as I don't take the benefit?

Hi,

I'm not sure that I fully understand your question. Delayed retirement credits (DRC) are only accrued for months of non-payment of benefits between full retirement age and age 70. If you choose instead to be paid Social Security benefits, delayed retirement credits won't be accrued for any months that you are paid.

If your current Social Security benefit would be $271 more than your tier 1 RR benefit, that means that it would be even higher if you wait until age 70 to file. If you start your Social Security now, though, you won't earn any more DRCs. And, if you choose to take 6 months of back pay, you'll lose the 6 months of DRCs (4%) that you would have earned by not taking the retroactive Social Security benefits.

You don't want or need to file for your Social Security benefits until you want to start drawing them. If you file for your Social Security benefit and choose to voluntarily suspend them, I suspect that the Railroad Board will also suspend your tier 1 benefit, and then you won't receive either SS or RR tier 1 until you reinstate your Social Security. If you've already filed a claim for Social Security, you'll likely either want to withdraw the claim and reapply at age 70, or go ahead and start drawing the SS benefits now in place of your tier 1 RR.

Best, Jerry