The ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs and qualified retirement plans. A recent call with a financial advisor in North Carolina is representative of a question we commonly receive related to Social Security benefits. The advisor asked:
“Regarding a couple I work with, each spouse is past full Social Security retirement age (FRA), and each delayed filing for Social Security benefits. It’s now 10 months past their FRA and circumstances have changed. The wife would like to start receiving her benefits and is wondering if it is possible to file for retroactive benefits as well.”
Highlights of Discussion
In the right circumstances, it is possible to claim retroactive Social Security benefit payments. For example, FRA claimants and survivor claimants may be paid for up to six months retroactively. In certain cases, benefits involving disability up to 12 months may be paid retroactively. (Source: Social Security Handbook, 1513, “Retroactive Effect of Application.”)
Example 1
Sally, who is fully insured, reached FRA in April 2013. She does not file an application for benefits until April 2014. Under the circumstances, Sally may be entitled to receive retroactive benefit payments beginning with the month of October 2013 (six months before she officially filed for benefits).
Example 2
Harry, who is fully insured, reached FRA in January 2014. He does not file an application for benefits until April 2014. Under the circumstances, Harry may be entitled to retroactive benefit payments beginning with January 2014.
Conclusion
There are many reasons individuals may choose to delay taking their Social Security benefit payments past FRA. But circumstances change and, fortunately, if the delayed benefits are needed, it is nice to know that the Social Security Administration makes provision for such retroactive payments in certain cases.
The Columbia Management Retirement Learning Center Resource Desk is staffed by the Retirement Learning Center, LLC, a third-party industry consultant that is not affiliated with Columbia Management. For informational purposes only. Please consult a tax advisor or attorney for specific tax or legal needs. © 2014 Columbia Management Investment Advisers, LLC. Used with permission.
