Retroactive SS benefits

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vtMaps
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Retroactive SS benefits

Post by vtMaps » Thu Oct 11, 2018 9:09 am

I plan to begin my SS benefits next March (2019) at the age of 67 and 4 months.

I understand that I may choose to receive up to 6 months of retroactive benefits (Oct-Dec 2018 plus Jan-Mar 2019).

My question is about how the DRC are applied. If I had started benefits this month (Oct 2018), my 2018 benefit checks would NOT reflect DRC earned in 2018. Is that also true if the benefits are applied for retroactively?

In other words, would the 9 months of DRC earned in 2018 (Jan-Sept) be applied to all 6 months of retroactive benefits, or only to the three 2019 months?

—vtMaps
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HueyLD
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Re: Retroactive SS benefits

Post by HueyLD » Thu Oct 11, 2018 11:01 am

If you elect to receive six months of retroactive benefits, it will be treated as if you had applied six month earlier. So, you won't get DRC for the months that you receive retroactive payments.

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ObliviousInvestor
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Re: Retroactive SS benefits

Post by ObliviousInvestor » Thu Oct 11, 2018 11:12 am

Here are the applicable references:

https://www.ssa.gov/OP_Home/cfr20/404/404-0313.htm
(3) Credits earned prior to entitlement. If you are full retirement age or older and eligible for old-age benefits but do not apply for benefits, your delayed retirement credits for months from the month of attainment of full retirement age through the end of the year prior to the year of filing will be included in the computation of your initial benefit amount. Credits earned in the year you attain age 70 will be added in the month you attain age 70.
https://secure.ssa.gov/poms.nsf/lnx/0300615690B.
When Benefits Are Increased Because Of Increment Months
DRC increases are effective:
•in January of the year following the year the increment months were earned;
•in the month of attainment of age 70; or
•in the month of death of the NH, for widow(er)s benefits with DRCs.
From reading that, my understanding is that:
1) Your 2018 months (received retroactively in 2019) would not have the 2018 DRCs.
2) The months received retroactively for prior 2019 would have 2018 DRCs but not 2019 DRCs.
Mike Piper, author/blogger

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Nestegg_User
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Re: Retroactive SS benefits

Post by Nestegg_User » Thu Oct 11, 2018 12:39 pm

....so for a person who reaches FRA in may, it is correct that filing for SS to start in december (no retroactive benefits)... they would receive “normal” benefit amount in December then in January they would receive benefits with the enhancement of the DRC....



{income from SS in december would need to be accounted for when considering how much less could be converted in Roth to stay below certain income thresholds / tax brackets}

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