Social Security delayed retirement credits payout delay

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crefwatch
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Social Security delayed retirement credits payout delay

Post by crefwatch »

Although I found this good discussion that included "delayed retirement credits"
viewtopic.php?f=2&t=337793
another recent thread about previous-year earnings credits prompts me to ask:

I started receiving SS benefits in May, 2020, at age 68 and 8 months. I filed by telephone (because of Covid), and got good service. (I am permanently locked out of establishing an online account because of faulty challenge questions from the government's credit agency challenge questions. I can't present my Passport at a closed local SS office.)

It was made clear to me that my payment would increase by a small amount in 2021 because of delayed credits from the remainder of 2020. But my deposits since January appear to have only increased by the amount of the inflation adjustment. When I called the SS service line, I was told that delayed retirement credits were being calculated over a period of several months this year, and I would eventually get the money.

The gross difference (monthly) I was quoted over the phone when claiming, was $2,938 in 2020 and $3,004 in 2021. (At that time, the COLA for 2021 was absolutely unknown, so it is not included.) But my November, 2020 COLA notice said the new gross amount for 2021 would be $2,976.20

However, my April, 2021 direct-deposit payment was still the same as January.

Do I need to worry about this?
mhalley
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Re: Social Security delayed retirement credits payout delay

Post by mhalley »

My understanding is that SS gives you the delayed retirement credits starting in January of the year after you file for SS. So I wouldn’t worry yet as everything is delayed due to covid. I but would call and check on it in say July.
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David Jay
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Re: Social Security delayed retirement credits payout delay

Post by David Jay »

You will also receive the benefit increase retroactively back to last May. Just give them a chance to get caught up.
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pahkcah
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Re: Social Security delayed retirement credits payout delay

Post by pahkcah »

I was in a similar situation: started collecting Social Security (SS) in August 2020, exactly a year after I had reached full retirement age. I assumed that the delayed retirement credits would be added to my payment (along with the COLA) in January 2021, but only received the COLA. After reading this thread, I decided to wait until June before contacting SS.

On June 7th, I visited the local SS office web site to find a phone number. The only number listed was the national one: 800-772-1213. I called that number expecting to be on hold for a quite a while but was pleasantly surprised when a representative answered after only 7 minutes. I explained the situation, but after trying for approximately 45 minutes to determine what was going on, the representative said I would need to contact the local SS office by phone. I was told that the local office would have access to records that the national representative could not see. Before ending our conversation, she provided a phone number for the local SS office.

I called the local SS office and was amazed that someone immediately answered the call. The SS representative was, just as in the first call, extremely helpful. She spent an hour on the phone with me trying to determine what had happened, or in my case, had not happened. She agreed that I should have received the delayed credits bump in January, but she also said that the records she needed to access were “archived” and that she would need to contact the people who manage the records. She took my phone number and said she would call me the next day.

On June 8, the local SS representative called and said that she had discussed the situation with the appropriate SS employees, and that they were going to take action to correct my payment. She said it might take a couple of weeks to resolve. I just signed into the “my Social Security” web site and noticed that my next payment in July shows a significant increase, which means the delayed retirement credits have now been added to my monthly payment. So, it basically took 10 days from start to finish to resolve this issue.

Again, the employees I spoke with were very helpful and provided support in a very professional manner.
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crefwatch
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Re: Social Security delayed retirement credits payout delay

Post by crefwatch »

pahkcah, thank you for that splendid reply.
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pahkcah
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Re: Social Security delayed retirement credits payout delay

Post by pahkcah »

You are welcome. I hope your situation is resolved soon.
montanagirl
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Re: Social Security delayed retirement credits payout delay

Post by montanagirl »

It'll show up, with a deposit for the part missed so far.

It was right about now for me but things may be more back up nowadays.
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crefwatch
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Re: Social Security delayed retirement credits payout delay

Post by crefwatch »

I know that individual agents can sometimes have incorrect information, but when I called SS today, I got a new piece of data.

The agent said that delayed retirement credits do not get paid-out until the recipient reaches the age of 70. Perhaps this is new, yet another way to reduce current expenditures without actually changing benefits? Since I turned 70 this month (as well as this being the first full calendar year since I began receiving benefits), I'll wait another six months before calling again.
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David Jay
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Re: Social Security delayed retirement credits payout delay

Post by David Jay »

crefwatch wrote: Thu Jul 29, 2021 8:35 amThe agent said that delayed retirement credits do not get paid-out until the recipient reaches the age of 70.
I can’t speak to what the agent said, but this is not broadly the case. If the agent intended this broadly (and not just addressing some specific of your case) then they mis-spoke or had wrong information.

At time of filing, DRCs earned in the current calendar year are applied to one’s account the January after the filing date. Pahkcaw (above) is such a case, they filed one year after FRA (i.e. at age 67) and even with the mix-up began receiving their DRCs at age 67.
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pahkcah
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Re: Social Security delayed retirement credits payout delay

Post by pahkcah »

David Jay wrote: Thu Jul 29, 2021 9:38 am
crefwatch wrote: Thu Jul 29, 2021 8:35 amThe agent said that delayed retirement credits do not get paid-out until the recipient reaches the age of 70.
I can’t speak to what the agent said, but this is not broadly the case. If the agent intended this broadly (and not just addressing some specific of your case) then they mis-spoke or had wrong information.

At time of filing, DRCs earned in the current calendar year are applied to one’s account the January after the filing date. Pahkcaw (above) is such a case, they filed one year after FRA (i.e. at age 67) and even with the mix-up began receiving their DRCs at age 67.
I agree that the agent was wrong. If a person is less than 70 years old, and above her/his FRA, the situation is as we have already stated: the delayed retirement credits are applied in January of the year after a person starts collecting her/his SS payment. In addition, a "true up" to cover the amount that should have been paid for the months prior to the start of payments is paid out to the recipient. It is different once an individual reaches 70. In that case, the delayed credits are supposed to be applied starting with the month the individual reached 70 years old.

Here is a link to SS delayed credits information: https://www.ssa.gov/OP_Home/cfr20/404/404-0313.htm

Below are the paragraphs that deal with when the delayed credits are effective. I marked the relevant sentences in bold.
-------------------------------------------------------------------------------------------------
(c) When is the increase because of delayed retirement credits effective?—

(1) Credits earned after entitlement and before the year of attainment of age 70. If you are entitled to benefits, we examine our records after the end of each calendar year to determine whether you have earned delayed retirement credits during the previous year for months when you were at or over full retirement age and you were fully insured and eligible for benefits but did not receive them. Any increase in your benefit amount is effective beginning with January of the year after the year the credits were earned.

(2) Credits earned after entitlement in the year of attainment of age 70. If you are entitled to benefits in the month you attain age 70, we examine our records to determine if you earned any additional delayed retirement credits during the calendar year in which you attained age 70. Any increase in your benefit amount is effective beginning with the month you attained age 70.

(3) Credits earned prior to entitlement. If you are full retirement age or older and eligible for old-age benefits but do not apply for benefits, your delayed retirement credits for months from the month of attainment of full retirement age through the end of the year prior to the year of filing will be included in the computation of your initial benefit amount. Credits earned in the year you attain age 70 will be added in the month you attain age 70.
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Chip Munk
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Re: Social Security delayed retirement credits payout delay

Post by Chip Munk »

pahkcah wrote: Thu Jul 29, 2021 12:27 pm I agree that the agent was wrong. If a person is less than 70 years old, and above her/his FRA, the situation is as we have already stated: the delayed retirement credits are applied in January of the year after a person starts collecting her/his SS payment. In addition, a "true up" to cover the amount that should have been paid for the months prior to the start of payments is paid out to the recipient. It is different once an individual reaches 70. In that case, the delayed credits are supposed to be applied starting with the month the individual reached 70 years old.

Here is a link to SS delayed credits information: https://www.ssa.gov/OP_Home/cfr20/404/404-0313.htm

Below are the paragraphs that deal with when the delayed credits are effective. I marked the relevant sentences in bold.
-------------------------------------------------------------------------------------------------
(c) When is the increase because of delayed retirement credits effective?—

(1) Credits earned after entitlement and before the year of attainment of age 70. If you are entitled to benefits, we examine our records after the end of each calendar year to determine whether you have earned delayed retirement credits during the previous year for months when you were at or over full retirement age and you were fully insured and eligible for benefits but did not receive them. Any increase in your benefit amount is effective beginning with January of the year after the year the credits were earned.

(2) Credits earned after entitlement in the year of attainment of age 70. If you are entitled to benefits in the month you attain age 70, we examine our records to determine if you earned any additional delayed retirement credits during the calendar year in which you attained age 70. Any increase in your benefit amount is effective beginning with the month you attained age 70.

(3) Credits earned prior to entitlement. If you are full retirement age or older and eligible for old-age benefits but do not apply for benefits, your delayed retirement credits for months from the month of attainment of full retirement age through the end of the year prior to the year of filing will be included in the computation of your initial benefit amount. Credits earned in the year you attain age 70 will be added in the month you attain age 70.
I agree. I am past FRA but not yet collecting. Each January, in addition to the COLA increase I also see the increase due to the DRCs earned through December of the prior year applied to the current benefit amount displayed in my online account. If I started collecting today, and was paid the current benefit shown in my online account, I would be receiving most of the DRCs I've earned to date, except for those I've earned since January of this year.

They also display the age 70 benefit online. If I divide that by 1.32, I get my PIA. I can easily calculate that the difference between my PIA and my current benefit amount is exactly equal to the dollar amount of the DRCs I am due for the number of months between the month I turned 66 and December of 2020.
FactualFran
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Re: Social Security delayed retirement credits payout delay

Post by FactualFran »

Here is a question related to recent posts. Suppose someone who will attain age 70 in October of a year starts benefits with the one for April of that year. Do the delayed retirement credits for the first few months of the year increase the payment with the one for October of the year or the one for January of the next year?

Based on other posts, the increase will likely not be in payment made for the month, but there will be retroactive adjustments made a few months later once the Social Security Administration data processing systems include the delayed retirement credits for the year that benefits started.
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pahkcah
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Re: Social Security delayed retirement credits payout delay

Post by pahkcah »

FactualFran wrote: Thu Jul 29, 2021 3:02 pm Here is a question related to recent posts. Suppose someone who will attain age 70 in October of a year starts benefits with the one for April of that year. Do the delayed retirement credits for the first few months of the year increase the payment with the one for October of the year or the one for January of the next year?

Based on other posts, the increase will likely not be in payment made for the month, but there will be retroactive adjustments made a few months later once the Social Security Administration data processing systems include the delayed retirement credits for the year that benefits started.
Based on the guidance provided by the Social Security Administration, if someone started receiving their SS payment in April, the payment amount for the months of April through September would be the same as the payment amount they were entitled to in the prior January. The October payment would include the delayed credits earned between January and April. Please note that the October payment would actually be paid in November.

One last comment. Please be aware that if someone is born on the first of the month, their birth month (for SS and Medicare purposes) is actually the prior month. So a person turning 70 on October 1 would actually turn 70 in September. I know this is true, as I was born on the first of one of the months.
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Re: Social Security delayed retirement credits payout delay

Post by FactualFran »

pahkcah wrote: Thu Jul 29, 2021 6:18 pm Based on the guidance provided by the Social Security Administration, ...
Thank you.
infrequentflier
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Re: Social Security delayed retirement credits payout delay

Post by infrequentflier »

I posted this elsewhere but it may belong here: Appreciate all help:
I reached FRA in June of 2019 and filed in Oct 2020. I was told by 2 SSA agents that they miscalculated my benefits and shorted me 7 mos ($151 each month). I was finally able to get 2021 payments corrected but they are saying I am not entitled to the 3 mos I was shorted, saying they pay the DRC the following January. But I was ALREADY 1 year past FRA and their their SSA Annual Statistical Supplement, Appendix D says “the delayed retirement increases begin to apply the year following the year the worker reaches FRA”. I think I am entitled to that $453 but I have to request a hearing. I would appreciate documentation and any confirmation that I am correct.
vested1
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Re: Social Security delayed retirement credits payout delay

Post by vested1 »

infrequentflier wrote: Tue Oct 05, 2021 6:11 pm I posted this elsewhere but it may belong here: Appreciate all help:
I reached FRA in June of 2019 and filed in Oct 2020. I was told by 2 SSA agents that they miscalculated my benefits and shorted me 7 mos ($151 each month). I was finally able to get 2021 payments corrected but they are saying I am not entitled to the 3 mos I was shorted, saying they pay the DRC the following January. But I was ALREADY 1 year past FRA and their their SSA Annual Statistical Supplement, Appendix D says “the delayed retirement increases begin to apply the year following the year the worker reaches FRA”. I think I am entitled to that $453 but I have to request a hearing. I would appreciate documentation and any confirmation that I am correct.
Please read this thread, which will answer your question about why you will not get a lump sum check for 7 months of your DRC's. Pay particular attention to FactualFran's and ObliviousInvestor's explanations and references.

viewtopic.php?f=1&t=357688&p=6218750#p6218750
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