by Russell Gloor

Dear Rusty: I was a little confused with one of your past articles. This September I hit my full retirement age and for every month I continue to delay, my SS benefit goes up a little more. But reading your article sounds like the extra benefits are only added at the end of the year. For example, let's say that at my full retirement age in September I get $3,524, and in January 2027 I would get $3,619. According to the Ask Rusty article I read, if I start my benefits in June of 2027, I will have earned $3,735, but it sounds like I would only get $3,619 up until the end of the year, and then they would adjust it. If this is the case, would I get retroactive money back for the 6 months I did not get the correct amount? Signed: Seeking Clarification

Dear Seeking: Thanks for your inquiry. Your understanding of the previous Ask Rusty article is correct. If you start your benefits in June 2027 (10 months after your full retirement age (or your “FRA,” in Sept. 2026), you will initially only get the Delayed Retirement Credits (DRCs) you earned through the end of 2026. The DRCs you earned from January 2027 to June 2027 would not be credited until January 2028, and you would not get any retroactive benefits for the DRCs earned during the January – June 2027 timeframe.

SSA’s reasoning for this is somewhat confusing but has to do with your ability to claim retroactive benefits when you claim after reaching your full retirement age. When claiming after reaching your FRA you have the ability to claim benefits retroactively for up to six months. So, to avoid potentially overlapping benefit payments, SSA defers applying your current year’s DRCs until January of the following year. Thus, you essentially lose the extra 2027 DRC money for the remainder of 2027. And, FYI, the one exception to this rule is that when benefits are claimed mid-year at age 70, all DRCs are immediately paid. Please understand that I’m not endorsing this SSA rule; only trying to explain how it works and why. Like many SSA rules, there are nuances to how benefits are paid. And this is a classic example. And just remember, as attractive as taking 6 months of retroactive benefits may sound, it also means your monthly amount would be reduced by about 4% for the rest of your life.

As you contemplate when you should claim your Social Security retirement benefits, you should always keep in mind your anticipated life expectancy when making that decision. If you expect to live at least to the “average” life expectancy for those in their mid-60s (about mid-80s for someone your current age), then waiting longer to claim is usually a better long term financial decision (even considering the DRC issue described above). But if your life expectancy is less than “average,” claiming sooner is usually a better choice.

If you have further questions about when to claim Social Security, please contact us at SSadvisor@amacfoundation.org or 1.888.750-2622. There is never a fee for our advisory service because we are a non-profit organization.

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This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (http://amacfoundation.org/services) or email us at ssadvisor@amacfoundation.org).

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