All of today’s questions involve the payment of what are known as “delayed retirement credits.” This is an incentive built into the law that augments the monthly Social Security checks of anyone who delays claiming Social Security benefits beyond their normal full retirement age. The maximum extra credit is 32 percent for people who wait until age 70 before signing up for Social Security.
Q: I just turned 68 yesterday. I was planning to wait until I turned 70 to apply for my Social Security benefits. I wanted to get the 32 percent bonus for doing that. But I recently got bad news. I have cancer and my prognosis for a long life isn’t good.
So now I want to start my Social Security checks right away. Will I be forfeiting my chance to get the bonus because I’m not going to wait until age 70 to file?
A: Sorry to hear the bad news about your health prospects. The small bit of good news I can share is that you didn’t mess up your chances to get augmented Social Security benefits. That’s because it is not a flat 32 percent bonus for waiting until age 70. You actually get a two-thirds of one percent credit for each month you delay after age 66.
So, if you sign up for Social Security now, you would get an extra 16 percent added to your monthly benefits. (Twenty-four months times two-thirds of one percent equals 16 percent.)
But if I were you, I’d strongly consider another option. When you sign up for Social Security after age 66, you can claim up to 6 months in retroactive benefits.
In other words, you could say you want the month you turned age 67 and a half to be the starting date for your Social Security checks. You would still get 12 percent worth of delayed retirement credits added to your monthly benefits — and you’d get a nice big back-pay check.
Q: I decided to keep working and delay taking my Social Security benefits until age 70. I am now 68 years old. I have been afraid to take a vacation since turning 66 because I understand I will not get the 32 percent bonus if there are any months between age 66 and 70 that I am not working.
I also live in fear that I will lose this job before I turn 70 and thus forfeit the bonus for that reason. Do you have any advice for me?
A: Yes, my advice would be to stop worrying — and for goodness sake, take a vacation!
If you wait until age 70 to file for your Social Security benefits, you will get the delayed retirement credit of 32 percent added to your Social Security checks — just because you waited that long to sign up for Social Security. Getting that extra boost in your monthly checks has absolutely nothing to do with working between age 66 and 70.
In other words, you would get the bonus whether you spend those four years working your tail off every day or sitting on the beach doing nothing.
Q: I am 67 years old. I planned to keep working at least until age 70 and not file for my Social Security until then. But I have a 28-year-old son living at home who has been severely disabled since birth.
Because he is an adult, I didn’t think he would be due any of my Social Security. But a neighbor told me he is. If he is, can my son get some of my Social Security now even though I’m still working and not ready to claim benefits myself?
A: Your neighbor is right. Your son is eligible for what are known as “disabled adult child” benefits on your record. But he can’t get any benefits on your record until you are getting them yourself. You’ve got several options and a decision to make.
You could sign up for Social Security right now. You’d get at least an 8 percent augmented retirement benefit, depending on how many months past age 67 you are. And your son would get an amount equal to 50 percent of your age 66 rate. He doesn’t share in those delayed retirement credits. Although, when you die, his survivor’s benefit (which is at a 75 percent rate) would be based on your full augmented benefit.
Or you could file now and claim 6 months of retroactive benefits for both you and your son. That would be a mighty handsome back-pay check, but it would include fewer delayed retirement credits for you.
Your third option initially sounds the least attractive. You could still wait until you are 70 to apply for Social Security. At that point, you would get 132 percent of your retirement benefit, and your son would get an amount equal to half of your age 66 rate. But the upside to this scenario is that upon your death, your son would get higher survivor’s benefits. He would get 75 percent of your fully augmented 132 percent retirement rate.
Q: I turned 69 in April and signed up for my Social Security. The Social Security rep told me I wouldn’t get my delayed retirement credits until next year. But after mulling that over, I called and talked to another rep who told me I would get all of my credits in my first check. So who is right?
A: Actually, they are both wrong. The rules generally say that if you sign up for Social Security between age 66 and 70, you can’t get the delayed retirement credits you are due for any months within a year — until the year is over.
So your initial benefit rate will include the delayed retirement credits you earned for the months from April 2015 (when you turned age 66) through December 2017. And then sometime in early 2019, they will add in the credits you are due for January through April 2018.