@RobertS771047 wrote:
Gail,
Thank you so much for your time. It is most appreciated and your reply was very helpful.
“If you want to retire (file for benefits) before your Nov. 2020 birthday,(that would be a mistake IMO)…”
Regarding filing eleven moths before FRA, if I could I’d like to wait until 70. But unfortunately, I could really use the money now. I did an analysis. If I file in January, I will lose approximately $114 a month had I waited until November.. In order for the loss of the revenue to equal what I won’t be collecting if I don’t file in January from January through October will take approximately ten years. Although I’d like to think otherwise, I’m skeptical I’ll make it that long judging by health considerations and the ages my parents passed away. I never married so survivors’ benefits are not a consideration in the equation.
“But your income won't matter because SSA (Social Security Administration) doesn't know WHEN you made the earned income during 2020 so unless you self-report, your SS check will not be docked for any earned income limits.”
I think I understand what you are referring to here. Not only is there an annual income limitation (48.6K in 2020 under the special rule of my OP), there is also a monthly limitation. Although I will not make over the annual limitation, I might (I have to figure that out) on occasions make over the monthly limitation. (As most people these days are paid bi-weekly, then three times a year there are three pays in a month. To my mind, this additional monthly limitation rule is just plain goofy. What difference does it make when the money is earned as long as one is within the annual limitation? Any which way they can get you, I guess.) Is this was what you were referring to in my above quote from your reply, please?
Finally, the MAJOR point for me is that even though I have not received retirement benefits at any time prior to 2020, the special rule will apply to me if I file in January of 2020? I will be under the greatly higher income limitations despite how the site I copied and pasted the paragraph from in my OP makes it sound? (It was not from SSA. From the SSA publication to which you kindly linked, there is no mention of a requirement that one has to have already filed for benefits and have been collecting them before reaching the advent of one’s FRA year. So is that correct? I CAN file in January 2020 and qualify for the special rule since I will turn 66 in November? I shall be under the higher income limitations?
NOTE: I might be wrong but your reduction amount seems rather high to me based on the fact that you are only filing a few months earlier than FRA - The reduction amount is:
https://www.ssa.gov/oact/quickcalc/early_late.html
In the case of early retirement, a benefit is reduced 5/9 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month.
Yes, filing before your FRA, even a few months before, will reduce your full retirement benefit.
As to your continuing to work and the earnings limit applicable in 2020 - yes, there is a monthly and annual limit and "officially" the special rule would affect you if you begin benefits before your FRA, even a few months before.
But since you will reach FRA a few months after you begin your early SS retirement, it is impossible for the SSA to know exactly when the income was earned - thus they rely on self-reporting and for you, this would only be for 2020. The special rule actually is more for those who have filed for early benefits (age 62 - 65). The special rule for them affects them a great deal more than it will affect you, if it affects you at all.
This SS publication explains this matter -
This is the 2019 edition so just insert 2020 where it reads 2019 -
Social Security.gov Publication: How Work affects Your Benefit
It reads:
Should you report changes in your earnings?
We adjust the amount of your Social Security benefits in 2019 based on what you told us you would earn in 2019.
If you think your earnings for 2019 will be different from what you originally told us, let us know right away. . . . . .
If you need help in figuring your earnings, contact us. When you call, have your Social Security number handy.
I believe that this is the reason why you need not really be that concerned with self-reporting when filing for early retirement (a few months early) and reaching FRA in the same year -
The publication further reads:
Will you receive higher monthly benefits later if benefits are withheld because of work?
Yes. If some of your retirement benefits are withheld because of your earnings, your monthly benefit will increase starting at your full retirement age to take into account those months in which benefits were withheld.
Depending upon how much you might earn in 2020 - you could make up for some of your reduced (early filing) benefits.
The publication further reads:
Are there other ways that work can increase your benefits?
Yes. Each year we review the records for all Social Security recipients who work. If your latest year of earnings turns out to be one of your highest years, we refigure your benefit and pay you any increase due. This is an automatic process, and benefits are paid in December of the following year. For example, in December 2019, you should get an increase for your 2018 earnings if those earnings raised your benefit. The increase would be retroactive to January 2019
Read the linked SS publication - You should be fine - Hope this helps.
It's Always Something . . . . Roseanna Roseannadanna
