Q: For Social Security retirement, does it matter what date of the month you are born?
A: Most of the time it does not, but an important exception does exist.
People starting Social Security retirement at age 62 learn that benefits are not usually due for the month they reach age 62. This is because they are not age 62 the entire month or, to be more technical, throughout the month.
If you reach age 62 on September 10, the first month for which you can receive benefits is October because you were not at least age 62 for all of September. Since October is when you are at least age 62 throughout the full month, October is the first month for which benefits can be paid. People who are already past age 62 when starting Social Security retirement can start benefits in the month of their choice because they are already at least age 62 throughout the month.
Note: This is a different subject from when Social Security benefits are paid. Benefits for a month are paid in the following month so a Social Security benefit for October is received in November.
The date of the month that you were born leads to an important exception to this. Legal precedent states that people attain their age on the day before their birthday. Thus, benefits are not paid for the month you reach age 62 unless your birthday is on the first or second day of the month. Based on this precedent, reaching age 62 on either the first or second day of the month makes you at least age 62 throughout the entire month. As a result, benefits are payable for the month.
Being born on the first of the month is also important when you reach full retirement age (FRA), again because of the legal precedent that a person attains their age on the day before their birthday. When born on the first day of the month, Social Security figures your full retirement age as if your birthday was in the previous month. The result is that being born on the first of the month acts to have you reach FRA in the preceding month.
The annual earnings test, which is about how your earnings in a given year can affect Social Security payments for that year, has earnings levels based on your full retirement age. There are no limits on your earnings once you reach FRA. You reach FRA sooner if born on the first of the month.
For more on this topic, go to http://ssa.gov/retire2/agereduction.htm and see the notes below the chart of full retirement ages. The following link also refers to the topic: http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/441/~/month-i-will-receive-my-first-check.
