Q & A
Will my Social Security benefit increase once I reach full retirement age?
Complete Question: I won’t be full retirement age for another two years, and as much as I’d like to wait to get Social Security, I just can’t afford to. I know I’m going to get a reduced benefit for not waiting. But what will happen when I reach 66 after taking a reduced benefit? Will it increase to the full amount?
Answer: I really wish I could say yes, but unfortunately, no. That percentage reduction is forever. In addition to cost of living (COLA) increases, there are two other things that could increase your benefit, depending on your situation – a spousal benefit and a voluntary suspension.
In terms of a spousal benefit, if you take a reduction on your own benefit now and at full retirement age (FRA) your spousal benefit is larger, your benefit will increase to cover some of the difference. For example, let’s say your husband’s FRA benefit is $2,000 and your FRA benefit is $900. This would mean that your current, age 64 benefit is $780. Once you turn 66, your benefit would increase to $880. However, this will not work for everyone because it only occurs if your spousal benefit is higher than your own FRA benefit.
In terms of voluntary suspension, you mentioned that you will have to take a reduced benefit now because of your financial circumstances. If for some reason your financial circumstances change, once you are FRA (66), you have the option of voluntary suspension. What this will do is stop your benefits and they will earn delayed retirement credits at a rate of 8% per year (pro-rated for a partial year) up to the age of 70. For example, let’s again use the amounts above where your current, age 64 benefit is $780. (For simplicity reasons, I will leave out the effects of COLA). Then you can voluntarily suspend this benefit at age 66 and reinstate it at 70, which will increase your benefit to $1,029/month ($780 x 132%). You can voluntarily suspend your benefit at any time between age 66 and 70.
Aside from these two circumstances and COLA, your benefit will generally not increase. Once you take the reduced benefit at an early age, it stays reduced. Any further calculations, such as delayed retirement credits due to voluntary suspension, will be based on that reduced amount.