Ask Larry

Are You Familiar With The Benefit Adjustment That's Supposed To Occur When Some Of Your Benefits Were Withheld?

I was referred to you and your website by Terry Savage.
Due to cash flow requirements, I started drawing my Social Security benefits at age 62 (in 2010) while I was still working. Until I reached retirement age ( I believe it was 66 in 2014), my benefits were reduced as an offset of my earned income. I have read that the monies which were deducted are added back as an adjustment to your benefits when you reach retirement age. However, when I've asked this question to the Social Security customer service people, they are unfamiliar with it, have advanced the question to a supervisor but I haven't heard back from them. Are you familiar with this type of adjustment and if its true, what is your advice about how/who to contact?
If you would like to contact me by phone and there is a fee associated with more personalized advice, please let me know.

Thank you,

Hi Lu. What you're referring to is an Adjustment of Reduction Factor (ARF). When you apply for benefits prior to full retirement age (FRA), your benefit rate is reduced for age based on the number of months that you claim benefits prior to FRA. If you don't receive benefits for all of those months due to the Social Security earnings test, when you reach FRA you get an ARF to increase your benefit rate that's based on the number of months that your benefits were withheld (

For example, let's say Amy files for Social Security retirement benefits 3 years prior to when she reaches FRA. Amy's primary insurance amount (PIA), which is equal to her full retirement age rate, would be $2000, but her benefit rate is reduced for age by 5/9ths of 1% for each of the 36 months that she's claiming benefits prior to FRA. That reduces Amy's benefit rate by 20%, or $400 (i.e. 5/9ths of 1% x 36), to $1600.

However, Amy continues working and due to the earnings test 18 months of her benefits are withheld between when she applied and her FRA. In that case, Amy would be due an ARF effective with the month she reaches FRA. The ARF would eliminate the reduction for age applied for the 18 months that Amy ended up not being paid benefits, resulting in a reduction factor of 10% (i.e. 5/9ths of 1% x 18) instead of 20%. That would increase Amy's benefit rate from $1600 to $1800.

Therefore, if some of your benefits were withheld due to the Social Security earnings test, you should have received an ARF to raise your benefit rate effective with the month you reached your FRA. If you don't think you did, you could ask Social Security for a recomputation by submitting a written and signed request on a form SSA-795 ( However, ARF processing is automatic, so it's likely that if you were due an ARF you may have received it without realizing the reason for the increase. Social Security should be able tell you whether or not you received an ARF by checking their computer records

Best, Jerry

Jan 18 2023 - 5:50pm
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