Providing Choice for Social Security Retirees Act
Bill: H.R.3889 | Sponsor: Rep. Smith, Adrian (R-NE)
Policy area: Social Welfare

Summary:
Providing Choice for Social Security Retirees Act
This bill allows an individual to claim a delayed-retirement credit for Social Security retirement benefits in a partial lump sum.
Under current law, an individual's Social Security retirement benefits are increased by a two-thirds of 1% for each month in which the individual, after attaining full retirement age but prior to attaining age 70, delays claiming those benefits. The bill allows an individual who delays claiming Social Security retirement benefits to instead opt to receive a smaller percentage increase (one-half of 1%) for each applicable month, plus a one-time lump sum payable at the time of the individual's entitlement to the benefits. The amount of this lump sum shall equal the sum of the present values of one-sixth of 1% of the amount of the individual's monthly benefits for each month in the individual's life-expectancy period.

To amend title II of the Social Security Act to provide an option to 
claim a delayed retirement credit in a partial lump sum, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Providing Choice for Social Security 
Retirees Act''.

SEC. 2. OPTION TO CLAIM DELAYED RETIREMENT CREDIT IN PARTIAL LUMP SUM.

    Section 202(w) of the Social Security Act (42 U.S.C. 402(w)) is 
amended by adding at the end the following:
    ``(7)(A) In any case in which an individual becomes entitled to an 
old-age insurance benefit in a calendar year after 2021, and such 
benefit is subject to a monthly increase under paragraph (1), such 
individual may elect to receive, in lieu of the monthly increase under 
paragraph (1)--
            ``(i) an alternate monthly increase as determined under 
        subparagraph (E); and
            ``(ii) in addition to such monthly benefit as increased 
        under clause (i), a one-time lump sum payment, payable at the 
        time of such individual's entitlement to such benefit, equal to 
        the sum of the present values (as determined by the 
        Commissioner of Social Security using reasonable assumptions) 
        of the applicable percentage (determined under subparagraph 
        (B)) of the amount of such monthly benefit (as determined 
        before the application of such increase) for each month in the 
        life expectancy period (determined under subparagraph (C)).
    ``(B) The applicable percentage determined under this subparagraph 
is the percentage equal to the product of--
            ``(i) \1/6\ of 1 percent, multiplied by
            ``(ii) the number (if any) of the increment months for such 
        individual.
    ``(C) The life expectancy period determined under this subparagraph 
is, with respect to an individual, the period--
            ``(i) beginning with the month in which the individual 
        becomes entitled to an old-age insurance benefit; and
            ``(ii) ending with the month before the last month of life 
        expectancy (as determined by the Commissioner of Social 
        Security using reasonable actuarial assumptions) for the cohort 
        of individuals who become eligible for an old-age insurance 
        benefit in the same month as the individual.
    ``(D) The Commissioner of Social Security shall certify to the 
Managing Trustee of the Federal Old-Age and Survivors Insurance Trust 
Fund the amount of any lump sum payment payable to an individual under 
subparagraph (A) and, upon receipt of such certification, the Managing 
Trustee shall make payment of such lump sum payment to such individual 
from such Trust Fund.
    ``(E) An alternate monthly increase for an individual determined 
under this subparagraph shall be equal to the monthly increase for the 
individual that would be determined under paragraph (1) if such monthly 
increase were determined by substituting `\1/2\' for `\2/3\' in 
paragraph (6)(D).
    ``(F)(i) For purposes of determining the amount of any benefit 
payable under this title on the basis of the wages and self-employment 
income of an individual who makes an election under this paragraph, the 
amount of any such benefit shall be determined as if such individual's 
old-age benefit had been increased under paragraph (1) without regard 
to this paragraph.
    ``(ii) For purposes of applying any reduction under subsection 
(k)(3)(A) to the monthly insurance benefit of an individual who makes 
an election under this paragraph, the amount of such individual's old-
age benefit shall be determined as if such old-age benefit had been 
increased under paragraph (1) without regard to this paragraph.''.
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