Before I get to today’s questions, all of which deal with claiming retroactive benefits, I must make this general point: The law says you can claim up to six months’ worth of retroactive benefits, as long as it doesn’t involve the payment of any reduced Social Security benefits. Or to put that another way, no retroactive retirement benefits can be paid prior to age 66. It’s a different story when it comes to disability benefits. And that is briefly explained down below.
Q: I will turn 70 in March 2018. I was planning to wait until then to start my benefits. But I recently retired and signed up for retirement benefits. They offered me the option of taking six months’ worth of retroactive payments, but I declined that. Now I’m wondering if I made a mistake. What do you think?
A: I’m just an old retired Social Security guy. As such, I’m not a financial planner. So I can’t tell you if you made a mistake or not. But I can explain Social Security’s rules and give you some food for thought — and some possible options you can consider.
You get a two-thirds of one percent increase added to your monthly Social Security check for each month you delay signing up for benefits after age 66. In other words, if you had taken retroactive payment, your ongoing Social Security benefit rate would have been 4 percent less than you are currently getting. (Six months times two-thirds of one percent equals 4 percent.)
My questions are: Do you want the benefit rate you are currently getting? Or would you be willing to accept 4 percent less but in return get a one-time check for the past six months?
If you like the idea of that six-month check, it’s not too late to do something about it. Anyone who files a claim for benefits has up to a year to change his or her mind. You recently filed for benefits, so I assume you are within the 12-month window. You could return to your Social Security office and say you want to withdraw your original claim. You would have to repay all benefits you’ve received so far. And then you could file a new claim with a starting date six months in the past.
Q: I applied for my Social Security checks when I turned 70. I am now 74. I learned from a neighbor that when he applied, he was offered the option of taking six months’ worth of retroactive checks. I never was given that option. Is there anything I can do about this?
A: You are well beyond the 12-month period of time that allows you to change your mind about your Social Security claim. But I will make two points.
Point one. My hunch is you were offered the opportunity to claim those six months of retroactive benefits, but you maybe weren’t listening or perhaps you were confused about the process. The retirement claim form asks you when you want your benefits to begin. You answered that question by indicating age 70. If you wanted them to start before that, you should have indicated a different date.
Point two. You said you started your benefits at age 70. If you really wanted them to start at age 69 and 6 months, why didn’t you simply file for your Social Security at that age? See my answer to the next question for more clarification.
Q: I will turn 70 in December 2017. That’s when I want to start my Social Security. When should I apply for my benefits? And should I ask for retroactive payments?
A: If you want your Social Security to begin at age 70, then you should apply for benefits by about October, telling them you want your benefit starting date to be December 2017. You could ask for retroactive benefits if you want. But if you want benefits now, why not just apply for them now? If you wait until later in the year and then ask for retroactive payments, aren’t you just loaning your money to the government interest-free? Why not take the money now and spend it or invest it?
Q: I applied for Social Security disability benefits when I was 58 years old. I am now 61. I have been fighting the government to get my money for three years now. And I finally won my case. But I only got retroactive benefits to January 2017. I should have been paid back to 2014 when I first applied for disability. What is going on here?
A: The issue of retroactivity is entirely different for Social Security disability claims. There is no limit to the amount of retroactive benefits that can be paid. So you could have received three years’ worth of retroactive benefits had they decided that you were disabled since your original filing in 2014. But my hunch is when your claim was finally approved, they concluded that your disability didn’t become severe enough for Social Security purposes until January 2017, so that is all the retroactive benefits you are due.
