There are literally hundreds of unique terms used within the Social Security laws, but we are going to highlight a few that will make this process easier for you to understand.
PIA – Primary Insurance Amount – this is the amount of your benefit at Full Retirement Age
FRA – Full Retirement Age – usually age 66 or 67, depending on age
COLA – Cost of living adjustment – for 2017 it is .3%
DRC – Delayed Retirement Credits – for each year that you wait to claim your benefit after FRA, you will earn an 8% increase to your benefit amount. From age 66 to 70 this will improve your benefit by 32%, from 62 to 70 it will increase by 76%.
GPO – Government Pension Offset – if you are receiving a pension from previous work not subject to Social Security tax and you qualify for Social Security benefits from other sources, your benefit could be reduced by up to two-thirds of your government pension amount. This effects spousal, divorced and widow benefits.
WEP – Windfall Elimination Provision – if you are receiving a pension for previous work not subject to Social Security tax, and you qualify for your own Social Security benefits, your benefits may be reduced but not eliminated because of WEP.
Early Retirement Reduction – if you are otherwise eligible, you can elect to receive benefits prior to FRA, but will experience a reduction of 6.25% per year up to age 62; this reduction totals 25%