Your month of entitlement with Social Security can mean more money in your pocket depending on what month you choose. If you are under your full retirement age or attaining your full retirement age in 2020, January of 2020 may be your best choice. Choosing the best month of entitlement for yourself is a big decision.
Your month of entitlement can be in the future or the past depending on your age and date of filing. The first possible month of entitlement is the month after the month you attain age 62. You must be 62 throughout the entire month. Be mindful that Social Security deems you to have been born one day before your actual date of birth so if your born on the first or second of the month you can select that month as your entitlement month.
If you are below your full retirement age and still working, you are subject to the annual earnings limit. The 2019 earnings limit for individuals under full retirement age is 17640.00. The earnings limit is increased a small percentage every year. What this means to you:
* If you are working and expect to be below the limit there is no effect on your benefits, if you want, you can start your benefits right away.
* If you are working and your earnings exceed the limit, Social Security will adjust your benefits accordingly. They withhold one dollar for every two earned over the earnings limit, for example:
your expected wages estimated at 25000.00
deduct the annual limit 17640.00
7360.00
the result is then divided by 2 equaling 3680.00 (referred to as chargeable excess income)
The chargeable excess income is then divided by your monthly benefit due resulting in how many months should be withheld. In this example, lets say your benefit rate is 980.00.
3680.00/980 = 3.75 which is then rounded up to 4 full benefit checks. Social Security does not do partial withholding.
So if you plan to work the entire year at 25000.00, January of 2020 would be best month of entitlement since January through April could be withheld and your payments would start in May resulting in your first retirement check being paid in June. If you were eligible, but decided to wait to file in 2020 until later in the year, the total money payable would be reduced since they can only withhold for the annual limit for payments that are due. In this same example, if you filed in October, no checks would be payable to you in 2020.
If you are attaining your full retirement age in 2020 the earnings limit you are subject to is higher and only applicable through your month of attainment. The difference is then divided by three to obtain the chargeable excess income.
Of course, what’s best for you depends on your personal portfolio and family situation.
Maryellen Foley-Eckert
SSA Specialist
