TN 71 (11-08)

GN 00204.039 Explaining Month of Election (MOE)Options

A. Introduction

When to start receiving benefits is a highly personal and important decision that determines the amount of benefits that the claimant will receive for the rest of his or her life. The claimant will likely consider many different personal factors when making this decision.

Social Security offers information about benefits to the claimants by mailing social security earnings statements, developing agency publications, and providing information and calculators for estimating benefits on social security’s internet site.

This policy helps the technician (claims representative or other SSA employee conducting the claims interviewer) determine what information can be provided during the interview to help the claimant make informed decisions on when to begin receiving benefits.

B. Policy

The role of the technician is to provide social security program information and not attempt to persuade the claimant about benefit decisions.

During the claims interview, the technician should screen the claimant to determine eligibility for benefits. Social security program information presented during the interview is based on the following:

  • Benefits for which the claimant may be eligible.

  • Applicability of information to the claimant’s situation.

  • Information requested by the claimant.

NOTE: When a claimant decides on a MOE, the technician should accept that decision.

C. Procedure to explain MOE options

The interviewing technician should not focus on breakeven points, which is when the total benefits received during a lifetime would be equal if comparing two different MOE.  The use of breakeven points is no longer applicable because of changes in life expectancy.  Also, this approach does not consider many personal factors that the claimant may need to evaluate when making benefit decisions.  The preferred explanation of when to elect benefits should entail the monthly benefit amounts (MBA)s for different start months and other information related to the claimant’s filing situation.      

If breakeven points are requested, the technician should calculate them, answer the questions, and emphasize the many significant factors that should be considered when making a MOE decision.

The interviewing technician should provide the following information during the claims interview when applicable to the claimant’s MOE decision process. This information is not required if the claimant has already decided when to begin receiving benefits. If the claim is filed in iClaim, contact may be required for clarification purposes. See GN 00204.055J for iClaim procedures.

1. Determine monthly benefit amount for different months of election

The technician should:

  • Determine the MBA based on different MOE.

  • Provide MBA for the earliest possible MOE, at full-retirement age (FRA) if later than the earliest possible month, and at age 70.

  • Provide MBA for any other months requested by the claimant.

Consider protective filing and retroactivity when determining the earliest possible MOE (see GN 00204.010).

Inform the claimant that entitlement to benefits affects all future payments to him or her unless the claim is withdrawn (see GN 00206.000).

a. Delay starting retirement benefits (RIB) after Age 62

The technician will explain how the MBA is higher for each month that benefits are delayed after age 62 and are reduced for age prior to FRA. (See RS 00615.000.)

b. Delayed retirement credits (DRCs)

The technician will explain how delaying retirement until after FRA will result in a higher MBA due to the accumulation of DRCs up to age 70 (See RS 00615.690).

2. Explain how earnings may change the MBA

a. Annual earnings test AET and adjustments at FRA

The technician wll:

  1. Review the earnings record (ER) with the claimant per GN 01010.011.

  2. Explain that he or she are allowed to earn an annual exempt amount and still receive benefits. (See RS 02501.000)

  3. Explain that after reaching FRA he or she can work, earn as much as he or she wants, and still receive full RIB. (See RS 02501.021.)

  4. Explain that in the year the monthly earnings test applies, benefits will be paid for any MOE in which the claimant does not earn wages of more than the monthly exempt amount and does not perform substantial services in self-employment (see RS 02505.065), even if the total earnings are in excess of the annual limit. See RS 02501.030 for more information concerning the monthly earnings test.

  5. Explain how the MBA will be increased at FRA for any months they didn’t receive a benefit payment because of work. (See RS 00615.480)

  6. Explain how auxiliaries affect the charging-off of excess earnings; and eligibility for other types of benefits for the claimant and auxiliaries (e.g. children, spouse, and divorced spouse). (See RS 02501.095B)

b. Effect of additional earnings on the benefit computation

The technician will explain how additional earnings after beginning to receive RIB, could increase the MBA based on the averaging of the highest 35 years of earnings.

3. Explain Auxiliary and Survivor Benefits

The technician will explain:

  • the effect of the MOE on auxiliary and survivor benefits.

  • that entitlement to a reduced benefit (whether received or not) will result in a Retirement Insurance Benefit limitation (RIB LIM) being placed on a subsequent widow(er)’s insurance benefit (WIB) amount (see RS 00615.320).

  • that RIB can be voluntarily suspended to earn DRCs even while the auxiliaries are receiving benefits. (See GN 02409.100 - GN 02409.130)

  • that a claimant who attains FRA,--when deemed filing does NOT apply,--may elect to receive only spouse’s benefits and continue accruing DRCs on his or her own social security record. The claimant may then file for RIB at a later date and receive a higher MBA based on the effect of DRCs. This is possible because a claimant may choose to limit or restrict the scope of the application to exclude a class of benefits. (See GN 00204.004 and GN 00204.020)

    NOTE: If a claimant elects not to restrict benefits on his or her own record but instead is awarded with benefits suspended, the MBA as a spouse will be lower (i.e., only the larger excess monthly benefit amount (LEMBA) will be payable).

  • that, if the claimant’s spouse is receiving or will receive a government pension based on non-covered earnings, the government pension offset (GPO) may apply to the spouse’s benefit. (See GN 02608.000)

  • if a potential claimant has a spouse who is eligible for unreduced benefits or children who could qualify on the ER, explain to the claimant that additional benefits are payable to the auxiliaries, and that a possible loss of benefits can occur if filing is delayed. Explain that benefits payable to auxiliaries will not be reduced because the claimant is receiving or has received reduced benefits.

  • if applicable, how children may be eligible for benefits. (See RS 00203.001)

4. Dual Entitlement (DE)

It is possible for a claimant to be eligible for:

  • Two reduced benefits or

  • An unreduced benefit and a reduced RIB or WIB

If the claimant is eligible to two reduced benefits, explain how their claim is processed for DE.

If the claimant is entitled to both an unreduced benefit and a reduced benefit, explain the amounts payable on each SSN and the effect of DRCs, if pertinent. Explain the effect of DRCs to a claimant who has reached FRA and is eligible for RIB. Since benefits are actuarially fair in general, explain to the claimant that he or she might consider receiving the smaller benefit first and preserving the larger benefit for the future. However, it must be the claimant’s decision.

A widow(er) is not required to be FRA to be eligible for a WIB increase based on the deceased claimant’s DRCs. Always explain the amount of future benefits payable, as well as the amount of current benefits payable, to help the claimant make an informed choice. Please refer to GN 00204.045 pertaining to RIB LIM situations and the discussion of the highest benefit month. Also, see #6 in this section when a claimant is a fully insured survivor.

NOTE: The field office or processing center will review the certificate of election for widow(er)’s benefits (SSA-4111). If RIB LIM is involved, the claimant may be re-contacted if he or she selects a month that does not maximize the benefit amount. (See RS 00207.025 and GN 00204.045)

5. Disability involvement

If the claimant is not insured for Disability Insurance Benefit (DIB) but is eligible for WIB and a higher RIB, discuss possible entitlement to Medicare as a disabled widow(er) since a disabled widow(er) may receive Medicare before age 65. Refer to RS 00207.020 concerning HI benefits for the disabled widow(er).

NOTE: If the claimant is insured for DIB and auxiliaries are involved, discuss the different RIB and DIB family maximums.

6. When the claimant is eligible to survivors benefits and RIB

A fully insured widow(er) has several options such as WIB first and RIB at FRA or at age 70 when he or she may receive DRCs. Explain all options so the claimant can make an informed decision. RS 00615.160 explains the computation of RIB after WIB.

7. Supplemental security income (SSI) is involve

If the claimant is eligible to receive or is already receiving SSI payments, the earliest MOE must be selected. (See SI 00510.001D. for the rules governing filing for Title II benefits when SSI is involved)

8. Medicare Involvement

If the claimant delays the start of RIB until after age 65, he or she may still file for Medicare but will be responsible for Medicare premium payments.

9. Mention personal factors that one might consider when unsure about when to begin receiving RIB.

You may mention the following personal factors that one might consider. However, you should not provide any advice concerning these factors.

  • The decision about when to begin receiving RIB is a personal one and there is no “right” answer for everyone.

  • MBA vary depending on when they start.

  • The number of years during one’s retirement might be substantial. One should consider financial needs now vs. later retirement years.

  • The effect of the RIB LIM and DRCs, and, how they affect WIB benefits.

  • Benefits for eligible spouses and children.

  • How earnings from continuing to work may affect RIB.

  • There is a chance that one can live long past the “average” life expectancy.

10. Examples to show a claimant when he or she insists on a breakeven calculation

  1. On July 3, 2008, Jane Smith whose date of birth is June 15, 1946 inquires about filing for WIB. Her deceased husband received RIB and the RIB LIM of $700.00 is the highest possible WIB. She is also insured for RIB with a PIA of $1000.00. Mrs. Smith is undecided on which record she should apply. She asks the technician to explain her options. She wants to know if she waits until age 70 to file for RIB how long she would have to live to recover the money not received by waiting.

    Option 1: Mrs. Smith can elect WIB benefits of $700.00 effective July 2008 and file for RIB at age 70 with a monthly benefit amount of $1320.00 (DRCs included).

    Option 2: Mrs. Smith can elect reduced RIB effective July 2008 and receive a monthly benefit of $754.10 from July 2008 continuing.

    OIA-(Option with initial advantage) is OPT 2

    OIA Exceeded in March 2017

    OPT1 TOT BEN = $79,700.008 years, 9 months

    OPT2 TOT BEN = $78,170.00

    8 years, 9 months

    No future breakeven date


    The technician will explain these options to Mrs. Smith and give her the breakeven of 8 years and 9 months. The technician will also explain to Mrs. Smith that there are many other factors to consider such as financial need now versus later retirement years. Her WIB will not increase but her own RIB benefits will grow considerably.

  2. Jay Crew comes into the office on July 17, 2008, inquiring about RIB. His date of birth is July 25, 1946. He is no longer working and is undecided on when to begin receiving his benefits. He is married and his wife is 60 years old. There are no eligible children. He has his annual earnings statement with him and asks the technician for an explanation of the different amounts. He is considering waiting until age 70 but he wants to know if that is to his advantage. Mr. Crew’s PIA is $1000.00 and his age 62 amount is $754.10 with $1320.00 at age 70.

    OIA is OPT1

    OIA Exceeded in January 2027


    OPT1 TOT BEN = $167,388.00

    18 years, 6 months

    OPT2 TOT BEN = $167,640.00

    10 years, 7months

    No future breakeven date


    The technician would explain to Mr. Crew about the increase in his MBA due to earning DRC. Mr. Crew will also be informed about how DRC could benefit his spouse. Also, explain to Mr. Crew that he should consider his financial needs now versus later retirement years and that there is no “right” answer for everyone.

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GN 00204.039 - Explaining Month of Election (MOE)Options - 03/18/2013
Batch run: 03/18/2013