Social Security: If You Wait To Retire Until After 67, Can You Get Retroactive Payments?

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If you wait to file for your Social Security retirement benefits until after age 67, you may be able to claim retroactive payments. However, things have changed since 2016, when Congress changed the law about how retroactive payments work. Now, you’ll have to stick to a strict timetable to get all of your benefits. You might also want to consider whether it makes sense to file for retroactive benefits or simply stick with the payments you receive at an older age, which may be higher. Here’s a look at what your options are when it comes to claiming retroactive benefits, along with what you might be giving up in exchange.

What Is Full Retirement Age?

Full retirement age is the age at which you qualify for your “full” Social Security benefit. For those born after 1960, which will include most retirees going forward, full retirement age is 67. However, this number varies depending on the year in which you were born. For example, if you were born in 1957, your full retirement age is 66 years and 6 months. If you were born between 1943 and 1954, your full retirement age is 66.

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What Are the Rules Regarding Retroactive Payments?

You cannot file for retroactive payments until you have passed your full retirement age. However, you can’t wait too long afterward. The Social Security Administration will pay a maximum of six months of retroactive payments to applicants, no matter how late they file. So, if your full retirement age is 67 but you apply for retroactive benefits at age 69, you’ll still only receive six months of back payments.

Remember that your full retirement age is important when it comes to retroactive payments because it governs the latest that you would want to file. If you were born in 1954, for example, you’d want to file for retroactive benefits no later than age 66 and 6 months, as filing any later wouldn’t qualify you for any additional retroactive payments. But if you were born in 1960 or later, you’d want to file between ages 67 and 67 1/2.

Will You Be Giving Up More Than You Earn If You Claim Retroactive Payments?

Something to keep in mind if you file for retroactive payments is that your Social Security benefit will automatically increase on its own every month that you wait to file. But if you claim retroactive benefits, you lose those gains. 

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Specifically, every month after full retirement age that you wait to file for benefits, your payment will increase by 2/3 of 1%. So, if your full retirement age is 67 and you wait to file until six months later, your lifelong monthly payment will increase by 4%. While you will forgo six months of retroactive payments, you would instead be getting a lifelong 4% monthly increase. 

You’ll have to determine on your own whether it’s a better move for you financially to take that lump sum of six months of payments or to permanently boost your ongoing benefit. You may want to consult with a financial advisor to determine your best course of action.

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About the Author

After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.
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