9144 / When can an individual claim retroactive Social Security benefits?

In general, if an individual waits until full retirement age to claim Social Security benefits, he or she may be eligible for up to six months’ worth of retroactive benefits. For example, if an individual claimed Social Security benefits at age 67 and his or her full retirement age was 66, he or she would be entitled to up to six months’ worth of retroactive benefits. If the individual claimed Social Security benefits at age 66 and three months, and his or her full retirement age was 66, he or she would be entitled to up to three months’ worth of retroactive benefits.

If the individual chooses to claim retroactive benefits, his or her permanent ongoing monthly benefit will be reduced based upon the number of months’ worth of retroactive benefits that are claimed.

Planning Point: Delayed retirement credits allow an individual’s eventual monthly benefit to grow by 0.66 percent per month, or 8.0 percent per year, in the time that elapses between full retirement age and claiming benefits. The latest that an individual can claim Social Security benefits is age 70.

Retroactive benefits are received in a lump sum payment.

Planning Point: Individuals considering claiming retroactive benefits should consider the potential tax consequences of the lump sum distribution, as well as any potential impact on income levels for purposes of the Medicare income-based surcharge.

Retroactive Social Security benefits can be valuable with respect to survivor and spousal benefits, which do not earn delayed retirement credits and reach 100 percent of their value when the surviving spouse or spouse reaches full retirement age. If a surviving spouse or spouse claims these benefits after reaching full retirement age, he or she should request up to six months’ worth of retroactive benefits (depending upon the time period that has elapsed between reaching full retirement age and claiming spousal or survivor benefits). However, in order to do so, the deceased spouse must have begun collecting Social Security benefits before full retirement age.

The surviving spouse or spouse’s own Social Security retirement benefits (i.e., based on the spouse’s own earnings record) will not be impacted, and can continue to earn delayed retirement credits until he or she eventually claims Social Security benefits.