Why Delayed Retirement Credits (DRCs) Aren’t Reflected Immediately

We have a client who called SSA. My primary question is how could the client be getting the exact same amount of Benefit if he files in November compared to filing at FRA this past July. To me it doesn’t make sense but she swears she called three times. Three SSA representatives, and they all said the same thing. Why isn’t the benefit increasing for Delayed Retirement Credits?

Delayed Retirement Credits (DRCs) are earned when you delay taking Social Security benefits past your Full Retirement Age (FRA). However, these credits are not immediately reflected in your monthly benefit amount. If your client reached FRA in July 2021 and decided to start benefits then, they would receive their full retirement benefit without any DRCs.

If your client chose to start benefits in November 2021 instead, their benefit for November and December would still not include any DRCs. This might explain why the benefit amount appears the same as if they had started in July. The reason is that Social Security only applies DRCs after the end of the year in which they were earned. This means that the increase from DRCs earned between July and November 2021 would not be added until January 2022, at which point their benefit would increase by 2.67%.

This delay can be confusing, but it’s standard practice. The only time all DRCs are applied immediately is when benefits start at age 70. If your client continues to delay, the adjustment for the DRCs will eventually show up, but not until the following year.

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