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Social Security Matters: Ask Rusty – Delayed claiming; am I now getting the right amount?

by AMAC Certified Social Security Advisor Russell Gloor, Association of Mature American Citizens

Dear Rusty: I am having problems getting answers from the national Social Security office or the local agent who I first spoke with to apply for my benefits. I am 70 in January 2021 and applied for benefits at the end of August 2020. I asked to have benefits start in October 2020 with my first payment received in November. I was told that the benefit for applying at age 69 and 9 months would not be received until January of 2021. Until then I would receive the 69 years and 0 months payment, which I received in November and December of 2020. In January 2021 however, I received the same 2020 payment plus the COLA increase. I’ve asked what’s up at the local office and have been waiting for a return phone call. My first question: is the amount I received in November and December last year correct, i.e., it is only the age 69 amount, not the 69 and 9 months benefit for the age I was at the time? And second, if that’s true, when in 2021 should I get my full amount? Signed: Confused

Dear Confused: I’ll try to clear this up for you. Delayed Retirement Credits (DRCs) of 0.667% are earned monthly for each full month you delay claiming after your full retirement age (which for you is 66). But although you earn delayed retirement credits monthly, Social Security only applies them in January of each year. You don’t lose them; they just don’t do the benefit adjustment until January of each year. That’s why you got only the age 69 benefit when you started your benefits in October and why your payment in November and December didn’t include those DRCs.

The SS payment you received in January was actually for your December benefits, and included the 2021 COLA increase (which is computed using your December benefit). And just as an FYI, they do apply DRCs immediately for anyone who claims at age 70, regardless of the month they claim. What happened to you was because you claimed before you were 70.

The additional 6% DRCs you earned between January and September last year should be applied in January of this year and should be included in your next benefit check, which you will receive in February (SS pays benefits in the monthly following they are earned). When they do that computation, they’ll automatically adjust your COLA using your new benefit amount. So, what you were told by the Social Security agent is essentially correct – your benefit payment won’t reflect those additional DRCs for 2020 until your January 2021 payment, which you will receive in February.

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