Apologies For Another Social Security Question

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muddlehead
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Joined: Mon Sep 22, 2008 2:03 pm

Apologies For Another Social Security Question

Post by muddlehead »

Couldn't find this answer.
I will turn 65 in August 2020.
I want to begin taking Social Security January 2021, 5 months later.
Question.
What is the difference in dollars, if any, between taking the monthly payouts in Jan 2021 vs waiting till August, 8 months later, when I will be 66 yrs old?
Thanks in advance.
neilpilot
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Re: Apologies For Another Social Security Question

Post by neilpilot »

I could be wrong, but I think each month's delay results in a 0.66% increase in SS benefit. No way anyone can tell you how many dollars that will be in your case.

Also, that increase is independent of any COLA adjustment.
Gryphon
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Re: Apologies For Another Social Security Question

Post by Gryphon »

If my math is correct, you were born in August 1955, and your full retirement age is 66 years & 2 months, which you will reach in October 2021. This web page shows how much your benefit will be reduced if you start taking SS before then. If you start in January 2021, that's 9 months early which will reduce your payment to 95% of the FRA amount. If you wait until August, you'll get 98.9% of your FRA amount.
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RickBoglehead
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Re: Apologies For Another Social Security Question

Post by RickBoglehead »

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oldcomputerguy
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Re: Apologies For Another Social Security Question

Post by oldcomputerguy »

According to Mike Piper's excellent book "Social Security Made Simple", you will reach what the SSA calls your "Full Retirement Age " in October of 2021, at which time you can claim unreduced benefits.

January of 2021 is 9 months prior to your FRA; August is two months prior to FRA. If you claim Social Security benefits before your Full Retirement Age, the Social Security Administration will reduce your benefit amount by 5/9 of 1% from FRA amount for each month before FRA that you claim.

Quick answer:

You get "full" (unreduced) benefits if you wait until October 2021 to start drawing.

Starting benefits in August 2021 (two months before FRA) will reduce your benefit amount by (5 / 9) * 1% * 2 months, or 1.11%

Starting benefits in January 2021 (ten months before FRA) will reduce your benefit amount by (5 / 9) * 1% * 9 months, or 5%.

It's impossible to tell what the actual dollar amount of these reductions will be without knowing the amount of your unreduced (FRA) benefit.
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Topic Author
muddlehead
Posts: 271
Joined: Mon Sep 22, 2008 2:03 pm

Re: Apologies For Another Social Security Question

Post by muddlehead »

Excellent. Thanks all. 95% of my full retirement benefit amount. Happy 2020 to everyone.
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