When will my late enrollment credit apply to my Social Safety Pension?

Ask Larry

Economic Security Planning, Inc.

Today’s column addresses questions about when late retirement credits are applied to retirement benefits, whether benefits from survivors from another country affect social security benefits, and whether they are eligible for social security benefits. Larry Kotlikoff is a professor of economics at Boston University and the founder and president of Economic Security Planning, Inc., which markets Maximize My Social Security and MaxiFi Planner.

You can find more Ask Larry answers here.

Do you have any questions of your own about social security that you would like to have answered? Ask Larry about Social Security here.

When will my late enrollment credits increase my Social Security Pension?

Hi Larry, I recently started getting Social Security benefits after waiting 23 months after my FRA. From your reading I came to the conclusion that 23 months delay after the FRA would result in an additional benefit amount of 15.33% (23 x 0.67%).

However, in January I only got the first 13 months with increases (8.67%). When I called the social security number, I was told that the state bureau I registered with are the people I need to speak to. The people at the state level told me that I have to wait until 2020 taxes are filed before I can get the additional credits.

Do I get the detour? Any thoughts? Thank you, Martin

Hello Martin, if you apply for benefits between full retirement age (FRA) and the age of 70 and use your benefits in a month other than January, you will initially only be credited with the delayed retirement credits (DRCs) earned up to December of that year before the year you claim your services.

Any additional DRCs earned in the year you claim benefits will not be credited until your benefit review for January of the following year.

For example, suppose Bob applies for benefits in April 2021 when he is 68 years old. Bob will initially only be credited for the 21 DRCs he has earned through December 2020. Bob’s additional three DRCs earned for January through March 2021 cannot be credited to his January 2022 benefit payment.

In addition, recalculations for partial year DRCs are only automated at regular intervals, so Bob’s benefit rate in the example above may not be increased to reflect the additional three months of DRCs until sometime in 2023. However, Bob would have paid any repayment that was due for months from January 2022.

I cannot tell from your description whether or not you used services in January 2021 or in a month in 2020, so I do not know whether your tariff was calculated correctly. If you used benefits in any month in 2020, your rate has likely been calculated correctly as your initial rate will then only include the DRCs you earned through December 2019.

And if so, you probably won’t get your 2020 additional DRCs until Social Security goes through their automated DRC recalculation process. To the best of my knowledge, these recalculations are only done once every two years, so you may have to wait a long time for your rate increase. Best of all, Larry

Can I get a widow’s pension from Switzerland and keep my social security benefits?

Hello Larry, I’m American and I was married to a Swiss man for seven years before he suddenly died in 2019 at the age of 63. We were living in Switzerland at the time. I’m seven years older than him. I was drawing my social security pension when he died. I’ve moved back to America since his death.

I want to know whether I can get a widow’s pension from Switzerland and keep my social security benefits? And who can I contact for information and support? I cannot get any information from the Swiss. They just ignore my requests. My social security benefits are so low that I had to rely on friends for support. I am desperate and I need help. Thanks Amy

Hi Amy, yes, at least potentially. I cannot tell you whether or not you are entitled to a Swiss widow’s pension, but if you can receive a Swiss widow’s benefit, it will not have a detrimental effect on your US Social Security benefits.

The US Social Security program has a totalization agreement with Switzerland, which means that you should be able to apply to a US Social Security Office for Swiss benefits. I believe all US Social Security offices are currently closed due to the pandemic, but you should be able to initiate the application process by calling Social Security at 800-772-1213. Best of all, Larry

If I have been paying into Social Security for 30 years, will I be able to receive payments?

Hello Larry, I retired from the railroad and also contributed to social security through other part-time work. I’ve been a social security contributor for almost 23 years, and although I retired from the railroad with a pension, I still work and have social security deductions.

If I have paid social security for 30 years, will I be entitled to payments? Thanks, Willard

Hi Willard, You wouldn’t have to pay into social security for 30 years to be eligible for benefits. As long as you have at least 40 quarters of coverage, or the equivalent of approximately 10 years of social security work, you can be eligible for social security benefits as early as 62 years of age.

However, if you receive Railroad Retirement (RR) benefits and apply for Social Security benefits, the Railroad Retirement Board (RRB) will offset your Tier 1 RR benefits against the amount of your Social Security benefits, dollar for dollar.

So, if you are receiving RR benefits, it is likely that you will only benefit from claiming Social Security benefits if your Social Security Rate is higher than your Tier 1 RR Benefit Rate. Best of all, Larry

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