I trust that anyone who has followed the subject knows how important it is to wait until age 70 to collect your Social Security retirement benefits. The reason for waiting is that SSA will increase your month benefits by 8% for each year you wait past full retirement age. This extra money is yours for every check you get until the day you die. In an age when you are lucky to get 1% return on cash, 8% guaranteed is extraordinary. But now comes word that some people who are properly waiting until age 70 are not getting the full benefit of their bargain. The trouble arises when claimants nearing age 70 tell SSA they plan to retire at that age. At this point, the SSA worker processing the claim starts the retirement right away, before age 70. This is bad enough, but SSA also goes back six months prior and gives the claimant a retro-active payment. This has the result of changing the claimant’s retirement age to roughly 69.5 years old. This means a loss of half of the delayed retirement credit for the age 69 year. This might not amount to much each month, but this locks in a lower amount for the rest of the retiree’s life.
So, what to do? When you put in for your benefits at age 70, tell SSA you do not want any retroactive checks. If you do not, SSA is going to give them to you automatically. Based on my experience, you have to tell SSA workers something about 10 times before they ever take note. Don’t assume just mentioning that you do not want any retroactive benefits will achieve the results you want. Put it in writing and then make sure SSA does not send you those six months of back payments. If they do send it anyway, return it to them and insist they get your retirement wishes right. If you did the prudent thing and waited until 70 to collect retirement benefits, don’t let SSA trip you up at the goal line.
For more on this, click here.
