Ask Larry: Why Is My Benefit Higher Than The Maximum Social Security Benefit Rate?

Today’s Social Security column addresses questions about published maximum Social Security benefit rates, payment of delayed retirement credits when filing after full retirement age and how spousal benefit rates are calculated. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.


Why Is My Benefit Higher Than The Maximum Social Security Benefit Rate?

Hi Larry, I was born in 1948. and I took my benefit at 70 after having more than 35 years at maximum social security wages. I receive more than what I’ve read is the maximum benefit someone can get per month this year and have each year since I began my benefit. Why is this? Thanks, Steve

Hi Steve, Social Security retirement benefits are based on an average of a person’s highest 35 years of Social Security covered wage-indexed earnings, and the indexing factors used to calculate a person’s benefit rate are different for each calendar year of birth.

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When you read someone making a claim about a maximum benefit rate, they are likely referring to people who were born in a particular calendar year.

Furthermore, the maximum benefit rate for each calendar year of birth changes after every year. If a person continues to work and pay into Social Security, they can keep increasing their benefit rate indefinitely.

So there really is no “maximum benefit rate,” there is only a maximum amount that each person could possibly be paid in a given year based on their year of birth, their earnings history, and when they started drawing their benefits. Best, Larry


How Do I Get Social Security To Give Me The Rest Of My Delayed Retirement Credits?

Hi Larry, I started receiving retirement benefits at 62 in 2011 in the amount of 1,379. At 66 in 2016, I suspended my benefits for 22 months. I started my benefits again in late 2017. I received a letter in June 2017 saying my 8% increase ($1,500 * 1.08) would increase to $1,625.

The 8% increase was for the 12 months I suspended in 2016. I never received a notice in 2018 for the 10 months I suspended in 2017 which would be a little short of 7%. I’ve called numerous times, but never received an answer. How do I resolve this issue? Thanks, Brian

Hi Brian, You definitely should receive a benefit increase of 2/3rds of 1% for each month that you voluntarily suspended your benefits. Those types of adjustments are normally automated, so any adjustment to which you were entitled should have been added to your benefit rate automatically.

If Social Security hasn’t given you credit for all of your delayed retirement credits (DRC) then about the only thing you do is explain the issue to them and try to get them to correct the problem. A lack of action on their part to give you credit for the rest of your DRCs isn’t a formal determination that can be appealed.

You could try submitting a request for a manual recomputation of your benefit rate, which you could do by explaining the problem in detail on a form SSA-795. If that doesn’t work, you may want to try contacting the offices of either your US congressional representative or one of your US senators.

Often an inquiry from a congressperson or senator can help resolve problems with Social Security. Best, Larry


Can You Confirm That My Wife Will Be Allowed To Collect Half Of What I Receive?

Hi Larry, My wife took early Social Security retirement benefits at reduced a rate at 64. She was born in 1953. I plan to retire this March at 66 and 2 months, my full retirement date. I have been told that my wife will be eligible to collect on my record at half of what I receive.

That would be a tremendous increase. Can you confirm this and explain why. Thanks, Sean

Hi Sean, Not exactly. Since your wife was born prior to 1/2/1954, if she hadn’t already applied for her own retirement benefits, she could have filed a restricted application for just spousal benefits when you start drawing your benefits. In that event, she would have been paid 50% of your primary insurance amount (PIA). A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

However, since your wife has already started collecting her retirement benefits, she can only be paid spousal benefits if your PIA is more than twice as much as her own PIA. If it is, then when you start drawing your benefits, your wife would be eligible for an excess spousal benefit that would be paid in addition to her own benefit. But she’ll retain the reduction that she took on her own benefit in order to start drawing early.

You and your wife may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry


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