Today’s column addresses questions about how and when delayed retirement credits (DRCs) are applies, how divorced spousal benefits are calculated, how survivor benefits are calculated, filing online and whether a deceased person’s application can be withdrawn. 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.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.


When Will I See My Social Security Retirement Benefit Increase After Waiting To File?

Hi Larry, If I don’t begin receiving my Social Security retirement benefit at 66 when I reach my full retirement age, how much will it increase by? I might wait another year or longer. Will I still get increases if I wait between one and two years or do I have to wait another full year after the first year to get more? Thanks, Josh

Hi Josh, Delayed retirement credits (DRC) add 2/3rds of 1% to a person’s benefit rate for each month that they delay collecting Social Security retirement benefits after full retirement age (FRA) up to 70. That amounts to an increase of 8% for each year they delay starting benefits.

However, if you apply for benefits between full retirement age (FRA) and 70 in any month other than January, you would initially only receive credit for any delayed retirement credits (DRC) you earned through December of the previous year. Any remaining DRCs earned in the year that you claimed benefits are credited in your benefit payment for the following January.

For example, if a person reaches their FRA of 66 in 7/2020 but delays starting their Social Security retirement benefits until 7/2021, their initial benefit rate would only include credit for six DRCs (i.e. July through December 2020). In other words, their initial benefit rate would only be 4% higher than their FRA rate, not 8%. The additional 4% increase for the months January through June 2021 would not be credited until the person’s benefit payment for the month of 1/2022. Furthermore, my understanding is that the automated process used to credit additional DRCs is only run every other year, so it could be awhile before such a person would actually see the additional 4% increase. Social Security would pay any back pay due once they process the recomputation, however.

You may want to use my company’s software — Maximize My Social Security or MaxiFi Planner —  to explore each of your potential filing options and settle on the best possible strategy for claiming your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry


Am I Missing Something?

Hi Larry, In my divorce settlement, it was calculated by the judge that I will receive $2,000 from Social Security per month at age 62. I am forced to take it at 62 as required by the decree. My former husband has paid the maximum over the last 10+ years. I will be 62 in 2028. And I am assured that this Social Security at 62 for $2,000 combined with another $1,000 by my ex, that I will receive, at minimum, $3,000 per month. Since this is all that I can expect to live on, this is quite important to me. I was completely dependent on him as I stayed home to raise our kids. It seems that this simply doesn’t sound right, that I am going to receive $2,000 a year at 62. Am I missing something? Thanks, Deanna

Hi Deanna, All I can tell you is that the judge handling your divorce case cannot set the amount that you’ll be eligible for from Social Security. Social Security is a federal program, and the benefit rates payable are determined by the earnings history of the worker on whose record the benefits are paid.

The most that a divorced spouse can be paid from the record of a living ex-spouse is 50% of the ex’s primary insurance amount (PIA), which is equal to their full retirement age (FRA) retirement benefit amount. And they’d only get the full 50% if they wait until full retirement age (FRA) to start drawing. If they instead start drawing at 62, their divorced spousal amount would be reduced by up to 35%.

The current maximum PIA for people reaching FRA in 2020 is $3,011. Therefore, the current maximum possible divorced spousal rate at FRA would be $1,505, which would be reduced to $978 for a divorced spouse whose FRA is 67 and who files at 62.

Furthermore, you can’t be paid both your own Social Security retirement benefits and a full divorced spousal benefit. If you qualify for both benefits you could only be paid essentially the higher of the two benefit rates, and your rate would be reduced if you file prior to FRA. Best, Larry


If My Wife Applies For Survivor Benefits Before Reaching FRA Will The Benefit Be Reduced For Age?

Hi Larry, I am 71 and my wife is 58. I delayed drawing my Social Security retirement benefit until 70 to increase my benefit to the maximum. Should I die before my wife reaches FRA, and she applies for survivor benefit, will the benefit be reduced depending on her age? Alternatively, should I survive until my wife reaches 62, files and receives a reduced benefit, does that also lock her in to a reduced survivor benefit when I die? Thanks, Hector

Hi Hector, If you die before your wife reaches full retirement age (FRA) and she files for widow’s benefits before FRA, then yes her widow’s rate would be reduced for age. If she started drawing widow’s benefits at 60, she’d receive 71.5% of your full rate, but if she’s at least FRA when she starts drawing widow’s benefits she’d get your full rate. If she starts drawing widow’s benefits between 60 and FRA, the closer she is to FRA when she starts drawing, the closer to 100% of your rate she’d receive.

Filing for either her own benefits at 62 or spousal benefits would not lock your wife into receiving a reduced survivor rate. She could still get 100% of your benefit rate if she’s at least FRA when she claims widow’s benefits. However, if your wife is drawing reduced spousal benefits and is not eligible for benefits on her own record, and if you die before she reaches FRA, her spousal benefits would automatically convert to survivor benefits and her rate would be reduced based on her age at the time of your death. Best, Larry


Can My Wife And I File Online?

Hi Larry, I am currently receiving spousal benefits from my wife, who filed when she was 66. She is now 67. I turn 70 in the beginning of August and want to claim my retirement benefits. We would also want her to receive spousal benefits based on my record. What do we need to do? Can we do all this online? Thanks, Jack

Hi Jack, You may be able to file for your benefits online, but your wife would have to file for spousal benefits by calling Social Security. They can take applications by phone even if their offices remain closed to the public due to the coronavirus.

Social Security’s website claims that they constantly expanding their online services, but one of the current limitations for filing online is if a person is currently receiving benefits on their own Social Security record. Therefore, your wife won’t be able to file for spousal benefits online unless and until Social Security further expands their online capability. Best, Larry


Can A Wife Return Her Deceased Husband’s Benefits And Take An Increased Benefit At Age 70?

Hi Larry, If a husband claims benefits at FRA of 66 while the wife is collecting her own retirement benefit and he passes away six months later, can the wife choose to return his payments, with the intent of taking the husband’s increased benefit when she turns 70? Thanks, Mary

Hi Mary, You can’t withdraw a deceased person’s claim after their benefits have started, so the wife in your question could not undo her husband’s application even if she returned the benefits he was paid. If any case, though, delayed retirement credits (DRCs) can’t accrue after a person’s death, so there’d be no advantage to withdrawing the husband’s claim in a case like this. Nor could the wife get a higher widow’s rate by waiting until 70 to apply.

Since her husband filed at full retirement age (FRA), this wife’s unreduced widow’s rate would be based on 100% of the deceased husband’s full retirement age rate, or primary insurance amount (PIA). She’d get that rate if she files for her widow’s benefits at her full retirement age (FRA) or any time after that. She wouldn’t get that full rate plus her own benefits, though, just the higher of the two benefit amounts. Best, Larry