Social Security application form

[GlynnC638297]

Okay here is my question I recently filled out my online social security application. In the block that asked me if I wanted to accept a permanent age reduction, I selected to retire at the earliest date possible without an age-related reduction. In the drop-down below it it offered me the month of February March  or April to start my social security. I believe my full retirement date would have been March 2025 because I was born July 31st 1958, but I selected February because of what I selected in the upper menu. I received my approval today but the amount was reduced about $17. Just not really a big deal but the question is why does the form allow you to pick a date before your full retirement age when just above it you have said I don't want to do that. Just to add that I am still working so did that make the $17 difference or was it the fact that I requested my Social Security to start technically at 66 and 7 months.

[Tonster521]

@GlynnC638297 Based on the info you provided, it sounds like you elected to start your SS Benefits in February 2025 which is before your Full Retirement Age in March 2025. I have to ask why did you elect February when you attain FRA in March? At any rate, based on the $17 reduction, it appears your SS Benefit at FRA is approximately $2,800. The reduction for one (1) month early is .006 or .6% or approximately $17. So, another question to answer is,are you financially better receiving a SS Benefit one month early (March 2025) with only a $17 reduction or one month later (April 2025) with $17 more? Remember, if you elect April, 2025, you will give up (delay) approximately $2,783 in lifetime SS Benefits. At $17 per month, you will recoup that loss in approximately 163 to 164 months or about 13 years 8 months or in your 80s. I used 0% as the discount rate to determine the time value. Instead of leaving those SS Benefits ($2,783) in the SS Trust, you elect to earn some money (i.e., 1%, 2%, 3%, etc.) on the $2,783, it will take longer to recoup, maybe mid 80s. Because I applied for SS Benefits over 10 years ago, I don't know if the online app is still the same. I recall that the SSA offers a lump sum up to 6 months early if applying in the year you attain FRA. That is also something to consider. You may find value discussing your case with a SS Rep. Good Luck.

[GlynnC638297]

Yes I did all the calculations and I'm not really worried about the reduction. My main question was when you select: "Earliest month possible but without a permanent age related reduction", and go to the next step why do they offer you a month that has a permanent age-related reduction. My payment is 3087 instead of 3104, like you said it will be over 15 years before it would have been a bad choice to take that one month early, even though I wasn't sure I was taking it one month early. It would be just nice if we have an answer here so in the future if somebody's looking for it it's easier to find. I always assumed my fra would be March 2025, but the form confused me. I am actually happy I took it one month early. Was just asking the question because I haven't seen the answer anywhere on the internet about why the form is contradictory in that area. I did finally find the place on the SSA site that actually allowed me to put in my date of birth and there it showed me that my fra was actually March. So I was just asking the question so that the next person who tried to fill out this form may have a more informed answer.

[Tonster521]

@GlynnC638297 I was able to find a copy of the 9 page paper application called SSA-1-bk and will try to copy and paste chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.ssa.gov/forms/ssa-1-bk.pdf Hopefully, I was successful. I believe you are referencing question 23 which indicates to answer only one option. I am not sure if the online application indicates the same. Perhaps the SSA needs some programming  to prevent electing two options. If two options are elected, it is nor clear which option will be used. 

[GlynnC638297]

This is a picture of my online application copy that shows the area in question. Once again thanks for bearing with me on this

[GlynnC638297]

[GailL1]

@GlynnC638297 

SSA.gov- More Info: Reduced Benefits - HLP-ISBA086-MOE4 

Hopefully this answers your question.  

Now do you know when your FRA is?

SSA.gov- Starting Your Retirement Benefits Early  

[GlynnC638297]

Yes I have read that and if you see the picture of my form I did select that but it offered me three different months so I thought that they wouldn't give me an option that was before my retirement date, but obviously they did

[GlynnC638297]

Yes thank you for the help, The online form is totally different  and really needs some fine tuning. I wont be the only one to make this minor mistake. I am happy with what I got just was hoping to get the issues out there for the next person.

[cat0w]

@GlynnC638297  

Have you checked the SS site?

The United States Social Security Administration | SSA

You may want to check with your nearest SS office.

Social Security Office in the US - The County Office

Be ready to pay taxes on your SS income depending on your total income for the year.