I accidentally applied for benefits at age 65 instead of at 66 or my FRA. When I realized my mistake, I had already received several months of benefits. On the day I turned 66, on September 6 to be exact, I sent a letter to suspend my benefits which they received in December. Therefore, I received a total of 10 months of benefits instead of 7 if they had suspended my benefits the month after I made my request. I should be resuming benefits this coming September when I turn 70. How will they calculate my new monthly benefit?

Hi. You'll retain a reduction for the months that you collected benefits prior to your full retirement age (FRA). The delayed retirement credits (DRC) you earned for suspending your benefits after FRA will then be applied to your reduced benefit amount. Each DRC will increase your benefit rate by 2/3rds of 1%.

For example, say Bob starts drawing his benefits 9 months prior to FRA. His full retirement age benefit, or primary insurance amount (PIA), was $2000, but his benefit amount is reduced by 5% to $1900 because he started drawing 9 months early. Bob then suspends his benefits from age 67 to 70. The 36 months of DRCs would increase Bob's rate by 24% (i.e. 36 x 2/3rds of 1%), which would be added to his reduced rate of $1900. That would raise Bob's benefit rate to $2356 (i.e. $1900 x 1.24).

The above example doesn't consider cost of living (COLA) increases, but you will receive credit for all COLA increases that occurred after your initial month of entitlement to benefits, including the COLAs that occurred while your benefits were suspended.

Best, Jerry