Ask Larry

Am I Entitled To A Slightly Higher Amount Because I Started My Benefits Two Months After Turning FRA?

I reached my FRA in December 2021 (age 66 and 2 months). I applied for my Social Security benefit in February 2022. My awarded amount was the same as Social Security advised it would be at FRA. Am I entitled to a slightly larger amount (age 66 and 4 months)? I spoke with an agent and she said the amount would be going up in January, but I think that may be the annual Cost of Living increase.
Also, since my husband is now collecting his spousal benefit, if I suspend my benefit when he reaches age 70 (and begins collecting his own benefit) will my account then continue to grow until I reach age 70?
Finally, the amount SS sent my husband as a spousal benefit is $6 less per month than half of my benefit. Is this something he should challenge?
Thank you.

Hi. You earn delayed retirement credits (DRC) for each month that you don't collect your Social Security retirement benefits between full retirement age (FRA) and age 70. DRCs increase a person's benefit rate by 2/3rds of 1% per month. So, assuming that you chose to start your benefits effective with February 2022 rather than your FRA month of December 2021, then your benefit rate will be higher than it would have been if you'd started drawing at FRA.

However, 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 the year you start collecting. Any DRCs earned in the year that you start drawing are subsequently credited effective with your payment for January of the year after the year you claimed benefits.

Therefore, it sounds like your initial benefit rate should have included 1 DRC (i.e. for December 2021), thereby raising your rate to 2/3rds of 1% more than your FRA rate. You won't get credit for the DRC you earned for January 2022, though, until effective with your benefit payment for January 2023. Furthermore, those types of recomputations are done using an automated procedure. My understanding is that such automated recomputations are only done every other year, so you may not actually see the rate increase to give you credit for your other DRC until the latter part of 2024. You will, though, be paid any back pay that you're due when the recomputation is processed.

And, yes, if you suspend your benefits again between FRA and age 70 you can earn additional DRCs and further increase your benefit rate by 2/3rds of 1% per month.

If your husband's full spousal rate is slightly less than half of your full retirement benefit amount, it's likely due to the fact that you were if fact credited with your DRC for December 2021. Spousal benefit rates are based on 50% of the worker's primary insurance amount (PIA), not 50% of their PIA plus DRC increases. Therefore, under the circumstances you describe it would be expected that your husband's spousal rate would be slightly less than 50% of your benefit rate, but without access to your actual Social Security records I can't say definitely that he's getting the correct amount.

Best, Jerry

Apr 4 2022 - 1:08pm
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