Chapter 18: The 100% Benefit
The worksheets from Chapter 18 of Fifty-Five. Type your own numbers, or try an example from the book to see how each one works.
Your benefit if you wait past full retirement age
How much bigger your check gets for each month you wait after full retirement age. The increase stops at 70.
The formula: Months past full retirement age × 2/3 = Your increase (%). Then Full-retirement-age benefit × (1 + increase) = Your benefit.
The calculator needs JavaScript. The paper worksheet below does not: it is the same arithmetic, written out.
The paper worksheet
Months past full retirement age ______ × 2/3 = Increase ______%
Full-retirement-age benefit $__________ × (1 + increase) = Your benefit $__________
Walk through it, step by step
- Find your full retirement age in the table above.
- Count the months from your full retirement age to the age you plan to claim. Years times 12, plus any extra months. Stop counting at 70.
- Multiply the months by 2, then divide by 3. That's your increase as a percent.
- Write the increase as a decimal and add 1. For 8%, that's 1.08. For 24%, it's 1.24.
- Multiply your full-retirement-age benefit from your Social Security statement by that number.
Check your answer
- Your answer must be bigger than your full-retirement-age benefit. If it isn't, you subtracted instead of added.
- If your full retirement age is 67, your answer can never be more than 1.24 times your full-retirement-age benefit.
- Social Security adds some delayed credits in the January after you start benefits, so your first checks may be a little smaller than this until then.
Figures this worksheet uses, and where they come from: Delayed retirement credit of 2/3 of 1% for each month past full retirement age (8% a year) (SSA, Delayed Retirement Credits); The increase stops at 70: 36 months, or 24%, when full retirement age is 67 (SSA, Delayed Retirement Credits).
Is the six-month lump sum worth it?
Compares taking up to six months of back payments with starting your benefit the month you apply. It finds how long it takes for the smaller check to cost you more than the lump sum.
The formula: Monthly benefit without back payments − Monthly benefit with back payments = What you give up each month, for life. Lump sum ÷ What you give up each month = Months until the smaller check costs you more than the lump sum.
The calculator needs JavaScript. The paper worksheet below does not: it is the same arithmetic, written out.
The paper worksheet
Benefit without back payments $__________ − Benefit with back payments $__________ = Given up each month $__________
Lump sum (months back × benefit with back payments) $__________ ÷ Given up each month $__________ = Months to break even ______ ÷ 12 = ______ years
Walk through it, step by step
- Work out your benefit if it starts the month you apply, using the first worksheet.
- Work out your benefit if it starts up to six months earlier, but never before your full retirement age.
- Subtract the second from the first. That's what you give up each month.
- Multiply the earlier benefit by the number of months of back payments. That's the lump sum.
- Divide the lump sum by what you give up each month. Then divide by 12 for years.
- Add that number of years to your age when you apply. If you expect to live past that age, the bigger monthly check usually wins.
Check your answer
- What you give up each month must be more than $0. Starting earlier never gives a bigger monthly check.
- Back payments can never start before your full retirement age, and never more than six months back.
Figures this worksheet uses, and where they come from: Back payments after full retirement age go back no more than six months, and never before full retirement age (SSA, Delayed Retirement Credits).