Ask Larry: Will My Social Security Retirement Benefit Increase Even If I Didn’t File And Suspend?

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Social Security may be one of your largest assets. What and when you collect will make a huge difference to your lifetime benefits.

Today’s column addresses delayed retirement credits (DRCs) in the absence of filing and suspending, when DRCs can be earned, eligibility for both retirement and widow(er)’s benefits, public pensions and benefits and maximizing benefits after filing early. Larry Kotlikoff is the founder and president of Economic Security Planning, a company that markets Maximize My Social Security, a Social Security benefits calculator referred to in this post.

See more Ask Larry answers here.

Ask Larry about Social Security:

Will My Social Security Retirement Benefit Increase Even If I Didn’t File And Suspend?​​

Hi Larry, I am 67 and stopped working at 62. I know I was eligible at my full retirement age of 66 to take my Social Security retirement benefits, but have delayed in order to earn several months of delayed retirement credits. I am worried that I should I have already filed and suspended my retirement benefit at 66 and so now my benefit won’t be increased. Is this true? Thanks, Nathan

Hi Nathan, You can still accrue delayed retirement credits (DRCs) even if you don’t file for and suspend your benefits at full retirement age (FRA). There is no difference in the crediting of DRCs whether you file for and suspend your retirement benefits at full retirement age (FRA) or simply wait until after then to apply for your retirement benefits. You may want to consider using an expert Social Security benefits calculator as described in other answers to compare your options in order to determine the best overall filing strategy for you and your child. Best, Larry

Who Is Correct?​​

Hi Larry, I have received my Social Security retirement benefit since I turned 63. I am now 67 and want to suspend my benefits until I am 70. Everything I’ve researched tells me I can gain 8% annually on my current monthly benefit. The folks at my local Social Security office say that is not the case and that, because I filed at 63, my benefit at 70 would only increase by about half of what they would at 8% per year. Who’s correct? Thanks. Hal

Hi Hal, You can suspend your Social Security retirement benefits and your benefit rate will increase by 2/3rds of 1% per month (i.e. 8% annually) for each month that you don’t receive payments. If you’re now age 67 and suspend your benefits until 70, you can earn an increase for each moth your benefit is suspended and the fact that you filed at 63 does not change this. Best, Larry

Am I Eligible To Receive Both My Own And My Deceased Husband’s Social Security?​​

Hi Larry, I will be 66 this year and am still working. I am thinking of retiring this year. My husband passed in 2010 at the age of 59. My income was always more than his but am I eligible to receive my Social Security widow’s benefit based on his record as well? Thanks, Patti

Hi Patti, I’m sorry for your loss. If you file for both Social Security widow’s benefits and retirement benefits on your own record, you’ll only be paid the higher of the two rates. But, if you don’t file for your own retirement benefits until age 70 they will continue to grow by 8% per year even if you’re drawing widow’s benefits.

So it may be best to file for widow’s benefits now or as soon as your earnings will permit at least some benefits to be paid, then switch to your own record at age 70, or to file for reduced retirement benefits on your own record now or as soon as your earnings will permit at least some benefits to be paid, then file for unreduced widow’s benefits effective the month that you will reach full retirement age. An expert Social Security benefits calculator, such as my company’s software or another very smart and accurate program, can help sort all of this out for you and help you determine your optimal strategy. Best, Larry

Will I Be Able To Collect Social Security?​​

Hi Larry, I plan on retiring at 65 from a job that didn’t collect Social Security taxes. I also qualify for full Social Security retirement benefits at 66yrs 4 months. Will I be able to collect on that? Thanks, Tom

Hi Tom, Yes, assuming that you have at least 40 quarters of Social Security coverage. However, if your earnings at your government job were exempt from Social Security taxes then your Social Security retirement benefit rate may be lower than normal due to the Windfall Elimination Provision (WEP). Best, Larry

When Should My Wife File For Spousal Benefits In Order To Get The Largest Check?​​

Hi Larry, My wife took her own retirement benefit in at 62. I was over FRA at the time and filed a restricted application for spousal benefits only immediately after she filed. I drew a spousal benefit until I filed for my own retirement benefit in at 69. When should she apply for her spousal benefit in order to get the largest check? Should she file now or when she reaches her FRA? Or does it make a difference? How will it be calculated? Thanks, Patrick

Hi Patrick, To get her highest monthly spousal amount, your wife would want to file effective with the month she reaches her full retirement age (FRA). Your wife’s unreduced spousal rate will be calculated by subtracting her Primary Insurance Amount (PIA), which is equal to her full retirement age (FRA) retirement benefit amount, from 50% of your PIA, but if she starts drawing before FRA her rate will be reduced for age. If she started drawing nine months prior to FRA, for example, the reduction would amount to roughly 6.33%. Best, Larry

To learn more about your Social Security options, visit Economic Security Planning, Inc.

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