Question on Retroactive Benefits
The following question came in from a blog reader:
“I am confused by Social Security retroactive benefits. I went in recently to file for SS and I was not offered any sort of retroactive benefit. However, when my neighbor filed for his SS he was given 6 months of retroactive benefits. Why did he get them and I didn’t? What did I do wrong?”
Born Too Late
You likely did nothing wrong, other than being born too late. The Social Security Administration office agents are taught to always offer retroactive benefits to people claiming Social Security if the claimants are entitled to those benefits. This is so ingrained in the application process that the default claiming method is for these benefits to be awarded, even if you don’t ask for them. This can actually lead to the problems I illustrated in my previous blog post, Beware of Retroactive Benefits.
Rules for Retroactive Benefits
The simple rules are:
Retroactive benefits cannot be paid if it results in a reduced benefit. In other words, they cannot pay them if you have not reached your full retirement age.
You can only receive a maximum of six months of retroactive benefits.
Since they are essentially back dating your application, your benefit will be calculated as if you claimed back at the beginning of the retroactive period.
These rules mean that you must have been under your full retirement age (FRA). You do not indicate your age, however if this happened recently your FRA must be either 66 or slightly higher. If you were older than your FRA the SSA would have defaulted to offering to backdate your application up to 6 months and therefore granting you retroactive benefits.
If you would like more information on this topic, please use the play button below to listen to the audio post.