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Social Security: Starting SSA retirement benefits early at reduced rate causes permanent reduction

Q: Is there a recalculation of your Social Security retirement amount once reaching full retirement age, even if you started benefits earlier?

A: Starting reduced Social Security retirement benefits when younger than full retirement age results in permanently reduced benefits.

Your retirement amount will not increase just because you have gotten older, although you do receive cost-of- living increases.

However, two routine reviews can increase your original benefit amount.

Both involve working while receiving Social Security retirement.

First, when reaching full retirement age (FRA) your benefits are reviewed to be sure that all reductions for age really apply, with increases for months that work prevented benefit payment.

For example, consider a person receiving SSA retirement while still working.

If his or her earnings were low enough to permit ongoing payment of all monthly benefits, this review would not change the SSA retirement benefit because all monthly payments were received.

However, say earnings were high enough to prevent benefit payment for five months.

Here the review at FRA would result in a benefit increase by the amount of those five months.

A second automatic review is an annual one. Benefits are routinely reviewed to learn if earnings from new work activity can replace years previously used to compute your retirement amount.

New and higher earnings on your record can replace one of the 35 years used previously.

When this happens, existing amounts are automatically recalculated and might increase benefits.

This automatic annual review usually occurs in the fall, once employer W-2's are all processed.

For example, increases due to 2011 earnings were paid in November 2012, retroactive to January 2012.

More about these two reviews are in the booklet, How Work Affects Your Benefits, at

Annual earnings test information for 2013 is also there.

Did You Know? You can request a replacement form SSA-1099 for tax year 2012 at

Based in Grand Forks, Howard I. Kossover is the Social Security Public Affairs Specialist for North Dakota and western Minnesota. Send general interest questions to him at Read his online articles at