Delayed retirement credits past FRA (but before age 70)
I understand that if someone delays claiming their retirement benefit past FRA to obtain delayed retirement credits but turns on Social Security before age 70, then the credits earned are not reflected in their Social Security benefit check until January of the year following when they applied for their benefits. For example, let’s assume that someone turns on their benefits on their 68th birthday which is June 15th, 2024. Is it true that this person would not see the increased benefit due to delayed retirement credits until January of 2025? If so, is this a permanent loss of benefits for the amount they should have received from July through December of 2024? Or does the SSA slightly increase the amount in January – on an ongoing basis – to reflect what was missed from July through December of 2024?
Thank you in advance!
Permalink Submitted by Alan - IRA critic on Wed, 2024-04-03 02:09
It’s a permanent loss of the DRCs for 2024, and is not made up after year end. But this loss does not occur if the person delays until 70.
Permalink Submitted by Todd Kirsch on Thu, 2024-04-04 17:55
Thank you. So to avoid this permanent loss, the strategy would be to file late in 2024 and begin benefits in January of 2025?
Permalink Submitted by ssel on Sat, 2024-04-06 03:05
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Permalink Submitted by ssel on Sat, 2024-04-06 03:10
Well, no. Because if you wait until 2025, you still won’t get those “lost” DRC payments for those few months. It’s just that by giving up all benefits in 2024, maybe you won’t notice that you’re not getting those DRC payments that year either.
So just ignore the whole thing. Those payments are not so much lost, as never promised to begin with. The system is arcane and peculiar, but that’s how it goes.