Larry answered "Just to clarify, though, benefits withheld due to the earnings test or FWT are not returned to the beneficiary. Instead, the person's benefit rate is adjusted as explained above to remove part or all of the reduction for age that was originally applied to their benefit rate"

This looks like it could be a strategy to evaluate. I assume your software can run this 'what if' scenario for all of this?

By applying now at 62.6/7, what % of age reduction would be applied to my benefit?
When the benefit amount was recalculated at FRA with any re credited withhold amounts, would that new figure be subject to WEP, or would the WEP be calculated on what the FRA would have been without the re-credits?
I am asking this also in relation to spousal benefits which are based on the workers PIA (which would have been reduced by claiming early).

Thanks Larry.

Hi. If a person starts drawing Social Security retirement benefits prior to their full retirement age (FRA), their benefit rate is reduced by 5/9ths of 1% for each of the first 36 months of reduction, and 5/12ths of 1% for each additional reduction month. In other words, if you start drawing 3 years prior to FRA your benefit rate is reduced by 20% (i.e. 5/9ths of 1% x 36 = 20%). Or, if you file 4 years early your benefit rate is reduced by 25% (i.e. ((5/9ths of 1% x 36) + (5/12ths of 1% x 12)) = 25%).

If you were born in 1959 then your FRA is age 66 & 10 months, so if you start drawing at age 62 & 6 months then your benefit rate would be reduced for age by roughly 26.67% (i.e. ((5/9ths of 1% x 36) + (5/12ths of 1% x 16)) = 26.666...%).

And, yes, our software (https://maximizemysocialsecurity.com/purchase) can handle computations involving automated reduction factor (ARF) adjustments when benefits are withheld due to the Social Security earnings test.

Best, Jerry