TN 26 (01-04)

RS 00615.015 How the Day of Birth Affects Benefits

A. POLICY

The day of the month on which a person is born affects both when he/she can be entitled as well as the amount of the benefit. Retirement benefits can begin the first month a person is age 62 throughout the entire month. (See RS 00201.001C.) Social Security follows English common law that finds that a person attains an age on the day before the birthday. (See GN 00302.400.) For example, a person born January 15, 2003 will attain age one on January 14, 2004. Therefore, a person is age 62 throughout an entire month if the 62nd birthday is on the first or second day of that month. Retirement benefits are reduced for each month of entitlement (MOE) prior to the month full retirement age (FRA) is attained. FRA ranges from age 65 for some people up to age 67, depending on the date of birth. Retirement benefits are computed using two factors:

NOTE: The throughout the month rule does not apply to the attainment of FRA. Unreduced benefits are payable beginning with the month FRA is attained regardless of the day of the month. For example, if the birth date is June 1, 1935, FRA is attained on May 31, 2000 and unreduced benefits can begin with May 2000.

B. EXAMPLES

To show how these variables interact let us take four people born over a four-day period through several examples.

1. Different Days of the Month

Anne was born 5/31/1935, Bill was born 6/1/1935, Cory was born 6/2/1935 and Demi was born 6/3/1935. They all worked at the same job and had maximum earnings from 1961 through 1991. They attain age 62 as follows: Anne on 5/30/1997, Bill on 5/31/1997, Cory on 6/1/1997 and Demi on 6/2/1997. Anne, Bill and Cory can begin receiving benefits 6/1997 (the first month they are age 62 throughout the entire month). Demi must wait until 7/1997 because she is not age 62 throughout the entire month of 6/1997. FRA for all four is age 65 so the number of reduction months (RF) varies. In 6/1997 Anne has 35 RF, Bill has 35 RF and Cory has 36 RF. In 7/1997 Demi has 35 RF. Because all four claimants have the same earnings and attain age 62 in the same year the full (unreduced for age) benefit amount would be the same – $1207. After reduction for entitlement before FRA, payments are made as follows:

Anne - $972 starting 6/1997

Bill - $972 starting 6/1997

Cory - $965 starting 6/1997

Demi - $972 starting 7/1997

2. Different Days of the Month and Different Years

Now lets change the four-day period. Anne was born 12/31/1935, Bill was born 1/1/1936, Cory was born 1/2/1936 and Demi was born 1/3/1936. They all worked at the same job and had maximum earnings from 1961 through 1991. They attain age 62 as follows: Anne on 12/30/1997, Bill on 12/31/1997, Cory on 1/1/1998 and Demi on 1/2/1998. Anne, Bill and Cory can begin receiving benefits 1/1998 (the first month they are age 62 throughout the entire month). Demi must wait until 2/1998 because she is not age 62 throughout the entire month of 1/1998. FRA for all four is age 65 so the number of reduction months varies. In 1/1998 Anne has 35 RF, Bill has 35 RF and Cory has 36 RF. In 2/1998 Demi has 35 RF. Although all four claimants have the same earnings they attain age 62 in different years. The year of attainment of age 62 determines the indexing factors and bend points used in computing the benefit amount. Anne and Bill who attain age 62 in 1997 have a full unreduced benefit amount of $1232. Cory and Demi attain age 62 in 1998 and have a full unreduced benefit amount of $1266. After reduction for entitlement before FRA, payments are made as follows:

Anne - $992 starting 1/1998

Bill - $992 starting 1/1998

Cory - $1012 starting 1/1998

Demi - $1019 starting 2/1998

3. Different Days of the Month, Different Years and Different Full Retirement Ages

One last time with another four-day period. Anne was born 12/31/1937, Bill was born 1/1/1938, Cory was born 1/2/1938 and Demi was born 1/3/1938. They all worked at the same job and had maximum earnings from 1961 through 1991. They attain age 62 as follows: Anne on 12/30/1999, Bill on 12/31/1999, Cory on 1/1/2000 and Demi on 1/2/2000. Anne, Bill and Cory can begin receiving benefits 1/2000 (the first month they are age 62 throughout the entire month). Demi must wait until 2/2000 because she is not age 62 throughout the entire month of 1/2000. FRA for Anne and Bill is age 65. FRA for Cory and Demi is age 65 and 2 months. The number of reduction months varies. In 1/2000 Anne has 35 RF, Bill has 35 RF and Cory has 38 RF. In 2/1998 Demi has 37 RF. Although all four claimants have the same earnings they attain age 62 in different years. The year of attainment of age 62 determines the indexing factors and bend points used in computing the benefit amount. Anne and Bill attain age 62 in 1999 and have a full unreduced benefit amount of $1372. Cory and Demi attain age 62 in 2000 and have a full unreduced benefit amount of $1410. After reduction for entitlement before FRA, payments are made as follows:

Anne - $1105 starting 1/2000

Bill - $1105 starting 1/2000

Cory - $1116 starting 1/2000

Demi - $1122 starting 2/2000

4. Summary of the Three Scenarios to Show How the Different Birth Dates Affect the Benefit Amounts and Payment Months:

Example One -

Name

Birth Date

FRA

Full PIA

Age 62

1st MOE

RF

Benefit

Anne

5/31/35

65

1207

5/97

6/97

35

972

Bill

6/1/35

65

1207

5/97

6/97

35

972

Cory

6/2/35

65

1207

6/97

6/97

36

965

Demi

6/3/35

65

1207

6/97

7/97

35

972

Example Two -

Name

Birth Date

FRA

Full PIA

Age 62

1st MOE

RF

Benefit

Anne

12/31/35

65

1232

12/97

1/98

35

992

Bill

1/1/36

65

1232

12/97

1/98

35

992

Cory

1/2/36

65

1266

1/98

1/98

36

1012

Demi

1/3/36

65

1266

1/98

2/98

35

1019

Example Three -

Name

Birth Date

FRA

Full PIA

Age 62

1st MOE

RF

Benefit

Anne

12/31/37

65

1372

12/99

1/00

35

1105

Bill

1/1/38

65

1372

12/99

1/00

35

1105

Cory

1/2/38

65+2

1410

1/00

1/00

38

1116

Demi

1/3/38

65+2

1410

1/00

2/00

37

1122


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0300615015
RS 00615.015 - How the Day of Birth Affects Benefits - 01/09/2004
Batch run: 01/27/2009
Rev:01/09/2004