Social Security: What Are Delayed Retirement Credits & How Can You Use Them For A Bigger Check (2024)
Georgina Tzanetos
·2 min read
Delayed retirement credits are a perk the Social Security Administration offers you for waiting to draw on your benefits. Your monthly benefit is increased by a certain percentage for each month you delay starting your benefits beyond full retirement age. Once you reach that age — which is typically 67 — you can request a benefits check.
The benefit increase stops when you reach age 70, which is the maximum distribution age. This means delayed retirement credits apply to any benefit you decide to take past your full retirement age, so a relatively short period of time, but worth the increase.The most a lump sum check will ever be is six months of benefits, which could be up to $9,000.
Delayed retirement credits are worth 8% a year, or two-thirds of 1% a month, and you can accrue them up until age 70. The table below shows how you can accrue these specific percentages based on your age.
Because of changes in FRA, the opportunity to collect delayed retirement credits will shrink beginning next year.
The Social Security Administration states that if you’ve already reached full retirement age, you can choose to start receiving benefits before the month you apply. However, you cannot receive retroactive benefits for any month before you reach full retirement age or more than six months in the past.
The earlier your full retirement age, the more credits you can accrue by waiting. Your specific situation will depend on whether or not you are able to wait for retirement benefits, but waiting will undoubtedly boost your monthly benefit. No matter how long you wait though, age 70 is the maximum age where credits stop accruing. If you have income from other retirement accounts, waiting to take social security could net you an increase without having to compromise on income in general.
Delayed retirement credits (DRCs) are credits we use to increase the amount of your old-age benefit amount. You may earn a credit for each month during the period beginning with the month you attain full retirement age (as defined in § 404.409) and ending with the month you attain age 70 (72 before 1984).
Social Security retirement benefits are increased by a certain percentage for each month you delay starting your benefits beyond full retirement age. The benefit increase stops when you reach age 70.
You can start receiving your Social Security retirement benefits as early as age 62. However, you aren't entitled to full benefits until you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.
This means delayed retirement credits apply to any benefit you decide to take past your full retirement age, so a relatively short period of time, but worth the increase. The most a lump sum check will ever be is six months of benefits, which could be up to $9,000.
If a worker begins receiving benefits before his/her normal (or full) retirement age, the worker will receive a reduced benefit. A worker can choose to retire as early as age 62, but doing so may result in a reduction of as much as 30 percent.
Delayed Retirement Credits increase your monthly Social Security benefit by a certain percentage for each month you delay taking benefits past your full retirement age, up to age 70.
There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount. However, there are ways to create your own bonus by maximizing the amount you're eligible to receive.
Delaying retirement gives you more time to save for your golden years and less time to live off your savings. Many retirees fear they will run out of money before they die, so the more time you spend saving, the less you'll depend on that nest egg when the time comes to stop working.
Some older adults delay retirement for psychological reasons, such as health benefits and social contacts. Recent research indicates that delaying retirement has been associated with helping one live longer.
Once your benefits stop, you have five years to reapply through expedited reinstatement and qualify for temporary payments while you wait for a decision. Each year, this five-year grace period helps thousands of workers get back on benefits slightly faster than if they started a new application from scratch.
There is no age at which you will no longer be taxed on Social Security payments. So, if those payments when combined with your other forms of income, exceed one of the two thresholds, then you will have to pay at least federal taxes on either 50% or 85% of the benefits you receive.
Spousal benefits don't earn the delayed retirement credits that will increase your own benefit by 8% annually between your full retirement age and age 70. Survivor benefits are a different matter.
The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67.
If you are full retirement age or older and eligible for old-age benefits but do not apply for benefits, your delayed retirement credits for months from the month of attainment of full retirement age through the end of the year prior to the year of filing will be included in the computation of your initial benefit ...
Another requirement is that the spouse must be at least age 62 or have a qualifying child in her/his care. By a qualifying child, we mean a child who is under age 16 or who receives Social Security disability benefits.
Either way, the COLA gets applied to your primary benefit. High COLAs can make delaying Social Security especially lucrative if you're able to wait past full retirement age and take advantage of delayed retirement credits. You'll earn 8% more for each year until age 70, when your benefits max out.
You must earn at least 40 Social Security credits to be eligible for Social Security benefits. You earn credits when you work and pay Social Security taxes. The number of credits does not affect the amount of benefits you receive.
Introduction: My name is Margart Wisoky, I am a gorgeous, shiny, successful, beautiful, adventurous, excited, pleasant person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.