Retroactive Social Security Benefits

[w119021w]

When I applied for social security benefits at age 70 I was told I'd receive six months of retroactive benefits, but was not told I could forgo the retroactive benefits to get a larger monthly benefit. So, after I received a $15000 check I knew I'd made a mistake. After a few months I filed a "Request For Withdrawal of Application". After another couple of months passed I had received nothing so I called Social Security, and was told they were waiting for me to return the benefits I had been paid. That was confusing since I'd not heard anything from them since I submitted the application. In any case, I asked the agent if she could tell me my what my new benefit would be after I returned the benefits received, and I submitted a new application. I was told it would be exactly the same since I had not worked again. I'm wondering what I need to tell them in order to avoid getting another retroactive benefit payment. Also, will I receive a payment for the six months of benefits that I'm returning? Thanks so much.

[GailL1]

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@w119021w wrote:

When I applied for social security benefits at age 70 I was told I'd receive six months of retroactive benefits, but was not told I could forgo the retroactive benefits to get a larger monthly benefit. So, after I received a $15000 check I knew I'd made a mistake. After a few months I filed a "Request For Withdrawal of Application". After another couple of months passed I had received nothing so I called Social Security, and was told they were waiting for me to return the benefits I had been paid. That was confusing since I'd not heard anything from them since I submitted the application.

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@w119021w 

If you filed SSA-521 known as a "Request for Withdrawal of Application" and signed it - you should have noticed that the repayment back of benefits stipulation was included in the IMPORTANT NOTICE on the form.  Many people send it back when they send in the form.  Then it goes on without a catch.

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@w119021w wrote:

 In any case, I asked the agent if she could tell me my what my new benefit would be after I returned the benefits received, and I submitted a new application. I was told it would be exactly the same since I had not worked again. I'm wondering what I need to tell them in order to avoid getting another retroactive benefit payment. Also, will I receive a payment for the six months of benefits that I'm returning? 

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The way I understand this withdrawal process - you have 12 months from the time the SS retirement benefit is filed for to file for a withdrawal and repay the benefits and then refile for the benefit later on.  Normally, a withdrawal is for people who decide to keep working and not get the benefits they filed for - there is only ONE withdrawal that people can file in their lifetime.

All the withdrawal does is to change the official date of your filing for benefits.  In your case, it seems, as I understand your post,  this will add 6-months to the date you initially gave them.

Your benefits haven't actually stopped.   Your current benefits based on your new date of retirement are being held in a suspense-type account until they know what you want to do or the time limit expires.  They are waiting for the return of the benefits that you have gotten to date to release your new benefit.  If you don't pay them back the old benefits, your new benefits cannot be released.

Your retirement benefits don't grow past 70 years old unless you keep working and then it only grows by the benefit computation in higher salary. 

The retirement benefit does grow from your full retirement age (FRA)  to age 70, regardless of your working status, because that is the period of time when "delayed retirement credits" (DRC) accrue.  [read the link on DRC]

By filing for your benefits at age 70, and you were not working, you were already going to get the max out of your benefit, including the full DRC.   By picking a BACK date for your retirement benefits (6-months) you were in essence getting your FULL retirement benefit but were only being shorted the 6-months of DRC.  

So if you repay ALL the benefits that they have sent to you to this point, you will receive your full retirement benefit to age 70 including all the DRC.   That's your full retirement benefit including your DRC.  That's probably what is being credited to you now - in the suspense account - awaiting your decision and the payback of the old benefits SSA paid you.

I don't see that SSA will owe you anything else - they will just release the regular retirement benefit (including all your DRC) on the new date of benefit establishment.  You will get whatever is in the suspense account once the benefit date starts (that's after they receive back the benefits that you have been paid to date).  Then you will have a new date of retirement - possibly the date that you turned 70.   SS benefits are paid one month in arrears.

[fffred]

I have read news articles about how the SSA "helpfully" assists applicants to get retirement benefits earlier than the applicant really wanted or intended to, by using this six months retroactive action. Sounds like you have gotten stuck in the system with this.

To clarify, since you are taking benefits at age 70 you are entitled to the "delayed retirement benefits" (or "DRCs") for the number of months beyond your full retirement age (FRA, and sometimes they call this the "normal retirement age"). The DRCs are applied for each month of delay. Thus someone who begins collecting benefits after their FRA would see varying benefit amounts if they "retired" at 27 months versus 28 months, or 43 months. Etc.

Thus in your case you should certainly see a difference in quoted benefit for beginning to collect your retirement benefit (you are then "entitled") between your "age 70" benefit and "age 70 minus 6 months" benefit.

This page at the SSA addresses how the benefit will vary with the number of months delay, see https://www.ssa.gov/benefits/retirement/planner/delayret.html

I say all this just to assure you that you are seemingly in the right and the SSA may be giving you incorrect information. I recently began collecting benefits at age 70 myself and I was very concerned that the SSA might slip up; my phone calls to them did not fill me with confidence.

Note that there is a "special" rule or case that applies if an applicant has delayed retirement credits but has not yet reached age 70. In this case, the payment for the first calendar year does not include the full amount of DRCs that the applicant is entitled to, but this will be made up the following January. Apparently the SSA only runs the calculations for the DRC in January of each year. This point has been discussed in this forum, you can search for the "January rule". This point may not apply to you (and it should not if you are getting benefits at age 70).

I would go back to the SSA and ask for clarification. Ask them why there is no apparent change (increase) in benefit if you reset your application so that you become entitled at age 70 and will have the full amount possible of DRCs. If the agent cannot give you a credible answer, ask (politely) to speak to someone up the chain.

Please let us know how this turns out. And good luck.

[GailL1]

fffred wrote:

I have read news articles about how the SSA "helpfully" assists applicants to get retirement benefits earlier than the applicant really wanted or intended to, by using this six months retroactive action. Sounds like you have gotten stuck in the system with this.

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More like some new employee just going thru the motions of the POMS and not paying attention to the age of the SS retirement applicant.

SSA.gov Delayed Retirement Credits

If you've already reached full retirement age, you can choose to start receiving benefits before the month you apply. However, we cannot pay retroactive benefits for any month before you reached full retirement age or more than six months in the past.

. . . . If you retire before age 70, some of your delayed retirement credits will not be applied until the January after you start receiving benefits.

Like always - confusion by words or the important details are in the small print - wonder who writes this stuff?