Social Security Tips – June 23, 2021

Delayed Retirement Credits

Social Security retirement benefits are increased by a certain percentage for each month a person delays starting their benefits beyond full retirement age.

The benefit increase stops when a person reaches age 70.

Increase for Delayed Retirement

Year of Birth*12-Month Rate of IncreaseMonthly Rate of Increase
1933-19345.5%11/24 of 1%
1935-19366.0%1/2 of 1%
1937-19386.5%13/24 of 1%
1939-19407.0%7/12 of 1%
1941-19427.5%5/8 of 1%
1943 or later8.0%2/3 of 1%

If your client has already reached full retirement age, they can choose to start receiving benefits before the month they apply. However, we cannot pay retroactive benefits for any month before they reached full retirement age or more than six months in the past. For example, if your client’s full retirement age is 66 and they don’t file for benefits until they’re 67, they can choose to begin benefits when they’re 66 and 6 months or any of the month’s in between, but no earlier. If they chose 66 and 6 months, they would be due 6 delayed retirement credits. If they chose 67, they would be due 12 delayed retirement credits.

If your client decides to delay their retirement, be sure to remind them of Medicare at age 65.

If they do not sign up at age 65, in some circumstances their Medicare coverage may be delayed and cost more.

If your client retires before age 70, some of their delayed retirement credits will not be applied until the January after they start receiving benefits. For example, if your client reaches full retirement age (67) in June but they plan to wait until their 69th birthday to start their retirement benefits. Their initial benefit amount will reflect delayed retirement credits earned from their full retirement age through the year before their 69th birthday. In January of the following calendar year, their benefit will increase for the credits earned in the year of their 69th birthday. Our Online Calculator gives estimates with all credits applied for comparison purposes.

The Q & A for the month:

Question: I have a client. Was married over 30 years. Divorced over 2 years. Not remarried. Both her and the ex-spouse are over retirement age and drawing social security. Her benefit is $1299 and the ex-spouse’s (also client of mine) benefit is well over $3300 a month. I’ve read and studied spousal benefits in this situation and I believe she is entitled to claim based on his earnings record… which would mean she’s due a significant increase. Am I seeing this correctly?

Answer: There are a few factors involved which may explain why she’s not currently receiving divorced spouse’s benefits. It would appear, based on the benefit amounts you provided, that she would be. However, it really is dependent on the full retirement amounts, which aren’t necessarily the amounts that they’re currently receiving. What you would need to know is if the $1299 that she’s receiving is a reduced amount. Also, the $3300 that he’s receiving, is that an increased amount based on filing after full retirement age? If indeed her full retirement amount is less than half of his full retirement amount then she absolutely should file for divorced spouse’s benefits and needs to contact Social Security.