Hello,

I reached my FRA in 66 in April, 2020.

Using the SSA’s AnyPIA calculator, I created a PIA which I then confirmed by manually recreating AIME and applying bend points to that AIME in Excel. I am fortunate in that my 35 highest years’ earnings all either exceeded maximum taxable earnings for that year or were indexed (for years before my 60th birthday) into a top 35 year.

The Excel version of my PIA allowed me to consider the impact of continuing to work beyond this year (when I reached FRA). In a nutshell, if I make more than the $137,700 taxable maximum in 2020, it contributes about $20 to my PIA. IOW, I pay nearly 13% in tax on that income to produce an insignificant benefit.

My question is, with respect to the very narrow question of maximizing benefits did I miss something?

By the way, I filed an app online and wrote in the remarks that I immediately wanted to suspend. The objective is to see what the “real” PIA would be. SSA says one cannot file and suspend since the 2016 law!

Thanks.

Best,
Alex

Hi Alex,

I don't see anything that you did incorrectly with regard to calculating your benefit rate, but there's not really an absolute maximum benefit amount. For example, if you continue working and earning more than the maximum amount subject to Social Security taxes, your benefit rate could be recalculated to replace your previous lowest indexed earnings year. So, in theory at least, you could continue working and increasing your benefit rate indefinitely.

Regarding what you were told by Social Security, you can still file for and suspend your benefits but you cannot suspend your benefits any sooner than the month after the month you request suspension (https://www.ssa.gov/planners/retire/claiming.html?intcmp=AE-RET-PLRT-REL...). So, the only way that you could apply for your benefits and suspend them effective with your first month of entitlement is if you select a month later than your month of filing as your month of election (MOE) to claim benefits. If you chose the month you applied or an earlier month as your MOE, you couldn't suspend your benefits effective with your MOE. That means you'd have to be paid for those months and you wouldn't receive delayed retirement credits for the months you're paid.

You don't mention whether or not you're married, but filing for and suspending your benefits could potentially prevent you from being able to collect survivor benefits. I don't have enough details to be able to advise you, but if you are married and/or if you can't suspend your benefits effective with the MOE you chose on your application then you may want to consider withdrawing your application (https://www.ssa.gov/planners/retire/withdrawal.html).

Best, Jerry