TN 24 (09-02)

RS 00615.692 Amount of Credit

A. POLICY

DRCs are added to the PIA (or the permanently reduced RIB). The chart in RS 00615.692C. shows the monthly credit for each possible DRC as both a fraction and as a decimal equivalent. The decimal equivalent can be used only for estimates. The fractions shown represent the part of one percent each credit is worth. 1/12% means 1/12 of one percent. The chart also shows the total credit possible per year. The chart in RS 00615.692D. shows how the change in FRA affects the total possible increase that may apply for any date of birth.

B. PROCEDURE

To add DRCs use the formula below:

MBA times # of DRCs times .01 times fraction = credit

or

MBA times # of DRCs times decimal equivalent = credit

Round this amount down to the nearest ten cents and add it to the MBA to determine the new benefit amount. (Prior to 6/82 round up.)

While these charts show both fractions and decimal equivalents, it is possible because of rounding that the decimal will sometimes result in an answer that is 10 cents less than the answer resulting from use of the fraction. For that reason, use the decimal equivalent only for estimates. Always use the fraction to compute benefits. (We include decimal equivalents here because we believe DRC calculations are used much more frequently for estimates than for actual payment amounts.) When using fractions it is important that you complete all multiplication before division. Failure to follow this order can result in the same difference as that caused by using the decimal equivalent.

For example:

PIA = $802.80

Date of birth = 6/15/1928

25 DRCs apply at 1/3 of 1%

The correct method to use:

$802.80 times 25 times .01 times 1/3 = $66.90

$802.80 + $66.90 = $869.70

Two other methods result in incorrect amounts.

Using a different order of multiplication and division:

25 times 1/3 times $802.80 times .01 = $66.89 ($66.80 after rounding)

Using the decimal equivalent:

$802.80 times 25 times .0033333 = $66.89 ($66.80 after rounding)

NOTE: ICF program #1 will compute delayed retirement credits. Instructions are in MSOM ICFT2 002.001.

C. CHART -- DELAYED RETIREMENT CREDITS

This chart shows the amount of each DRC based on the claimant's date of birth.

Date of Birth

Monthly Credit

Decimal Equivalent

Yearly Credit

Before 1/2/17

1/12%

.0008333

1%

1/2/17 thru 1/1/25

1/4%

.0025000

3%

1/2/25 thru 1/1/27

7/24%

.0029167

3.5%

1/2/27 thru 1/1/29

1/3%

.0033333

4%

1/2/29 thru 1/1/31

3/8%

.0037500

4.5%

1/2/31 thru 1/1/33

5/12%

.0041667

5%

1/2/33 thru 1/1/35

11/24%

.0045833

5.5%

1/2/35 thru 1/1/37

1/2%

.0050000

6%

1/2/37 thru 1/1/39

13/24%

.0054167

6.5%

1/2/39 thru 1/1/41

7/12%

.0058333

7%

1/2/41 thru 1/1/43

5/8%

.0062500

7.5%

After 1/1/43

2/3%

.0066667

8%

D. CHART -- MAXIMUM DELAYED RETIREMENT CREDITS FOR DIFFERENT DATES OF BIRTH

This chart shows the relationship between the changes in FRA and DRCs.

Date of Birth

RIB
FRA

Monthly
Credit

Yearly
Credit

Max
Months

Max
Credit

Before 2/2/12

65

1/12%

1%

84

7.00%

2/2/12 thru 3/1/12

65

1/12%

1%

83

6.92%

3/2/12 thru 4/1/12

65

1/12%

1%

82

6.83%

4/2/12 thru 5/1/12

65

1/12%

1%

81

6.75%

5/2/12 thru 6/1/12

65

1/12%

1%

80

6.67%

6/2/12 thru 7/1/12

65

1/12%

1%

79

6.58%

7/2/12 thru 8/1/12

65

1/12%

1%

78

6.50%

8/2/12 thru 9/1/12

65

1/12%

1%

77

6.42%

9/2/12 thru 10/1/12

65

1/12%

1%

76

6.33%

10/2/12 thru 11/1/12

65

1/12%

1%

75

6.25%

11/2/12 thru 12/1/12

65

1/12%

1%

74

6.17%

12/2/12 thru 1/1/13

65

1/12%

1%

73

6.08%

1/2/13 thru 2/1/13

65

1/12%

1%

72

6.00%

2/2/13 thru 3/1/13

65

1/12%

1%

71

5.92%

3/2/13 thru 4/1/13

65

1/12%

1%

70

5.83%

4/2/13 thru 5/1/13

65

1/12%

1%

69

5.75%

5/2/13 thru 6/1/13

65

1/12%

1%

68

5.67%

6/2/13 thru 7/1/13

65

1/12%

1%

67

5.58%

7/2/13 thru 8/1/13

65

1/12%

1%

66

5.50%

8/2/13 thru 9/1/13

65

1/12%

1%

65

5.42%

9/2/13 thru 10/1/13

65

1/12%

1%

64

5.33%

10/2/13 thru 11/1/13

65

1/12%

1%

63

5.25%

11/2/13 thru 12/1/13

65

1/12%

1%

62

5.17%

12/2/13 thru 1/1/14

65

1/12%

1%

61

5.08%

1/2/14 thru 1/1/17

65

1/12%

1%

60

5.00%

1/2/17 thru 1/1/25

65

1/4%

3%

60

15.00%

1/2/25 thru 1/1/27

65

7/24%

3.5%

60

17.50%

1/2/27 thru 1/1/29

65

1/3%

4%

60

20.00%

1/2/29 thru 1/1/31

65

3/8%

4.5%

60

22.50%

1/2/31 thru 1/1/33

65

5/12%

5%

60

25.00%

1/2/33 thru 1/1/35

65

11/24%

5.5%

60

27.50%

1/2/35 thru 1/1/37

65

1/2%

6%

60

30.00%

1/2/37 thru 1/1/38

65

13/24%

6.5%

60

32.50%

1/2/38 thru 1/1/39

65&2

13/24%

6.5%

58

31.42%

1/2/39 thru 1/1/40

65&4

7/12%

7.0%

56

32.67%

1/2/40 thru 1/1/41

65&6

7/12%

7.0%

54

31.50%

1/2/41 thru 1/1/42

65&8

5/8%

7.5%

52

32.50%

1/2/42 thru 1/1/43

65&10

5/8%

7.5%

50

31.25%

1/2/43 thru 1/1/55

66

2/3%

8%

48

32.00%

1/2/55 thru 1/1/56

66&2

2/3%

8%

46

30.67%

1/2/56 thru 1/1/57

66&4

2/3%

8%

44

29.33%

1/2/57 thru 1/1/58

66&6

2/3%

8%

42

28.00%

1/2/58 thru 1/1/59

66&8

2/3%

8%

40

26.67%

1/2/59 thru 1/1/60

66&10

2/3%

8%

38

25.33%

After 1/1/60

67

2/3%

8%

36

24.00%


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0300615692
RS 00615.692 - Amount of Credit - 12/21/2004
Batch run: 01/27/2009
Rev:12/21/2004