Today’s column addresses questions about whether Social Security reps normally try to convince people to take their retirement benefit before they turn 70, whether to file for retirement benefits after taking survivor benefits and when spousal benefits could be paid along with public pensions. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.
See more Ask Larry answers here.
Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.
Is It Normal For Social Security Agents To Try To Get You To Start Your Benefits Sooner?
Hi Larry, I was born in 1955 and am currently applying for my Social Security retirement benefit. A few weeks after making my application online, I received an email from the SSA saying I needed to talk to an intake agent before my application could be further processed.
When I contacted the agent the reason was that they wanted me to take my benefit four months earlier than I requested. The agent actually implied that I was stupid for not doing this and “was leaving money on the table.” Why would they do this? Is this the SSA’s normal operating procedure? Thanks, Kyle
Hi Kyle, It is normal operating procedure for a claims representative to explain what filing options are available to people when they apply for benefits, but employees are not supposed to advise people or try to unduly influence their decisions. So it sounds like the representative you dealt with was definitely overstepping their bounds when they spoke with you.
That said, there are times when filing for benefits retroactively can be advantageous, but I don’t have enough details about your circumstances to know what might be best for you. Most likely though, starting your benefits four months earlier than you planned to would simply mean receiving some back pay in return for a 2% to 3% permanent reduction in your permanent monthly benefit rate.
Choosing the best possible month to start your benefits can be very complicated, so you may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
Am I Entitled To Anything Further On My Own Record?
Hi Larry, I started receiving Social Security survivors benefits at 62 after my husband died. I will be 68 this year and wonder if I am entitled to any further benefits on my own work record. I thought I read something about being born before 1954 but didn’t quite understand it. I was born in 1953. Can you help? Thanks, Lindsay
Hi Lindsay, I’m sorry for your loss. Being born prior to 1954 is only significant if a person is potentially eligible for both Social Security retirement benefits based on their own work record and for spousal or divorced benefits on the record of a living spouse or ex-spouse. The fact that you were born prior to 1954 wouldn’t make any difference in your situation.
You could apply for benefits based on your own Social Security work record if you qualify, but there’d probably be no reason to do that unless your own benefit rate would be higher than the amount of your survivor benefit.
People who file for more than one type of Social Security benefit can only be paid up to the higher of the two benefit rates. Therefore, if your own benefit rate would be lower than your survivor rate, you wouldn’t gain anything by filing for your own benefits.
If you are eligible for a higher retirement benefit rate based on your own work record though, then it would likely be better for you to wait until 70 to apply.
Your own retirement benefit rate would continue to grow by 8% per year until you reach 70 if you wait until then to start drawing your retirement benefits. Again though, filing for your benefit at 70 still wouldn’t help you unless your retirement benefit rate would be higher than your survivor rate. You should be able to find out how much your own benefit would amount to by contacting Social Security. Best, Larry
If I File At 62 Will My Wife Qualify For An Additional Spousal Benefit?
Hi Larry, If I file early at 62 will my wife qualify for an additional spousal benefit? Her current benefit, reduced by the WEP, is less than 50% of my projected benefit. Thanks, Chris
Hi Chris, Your wife could only qualify for spousal benefits in addition to her own benefits if your primary insurance amount (PIA) is more than twice as much as her PIA. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).
Even if your wife would qualify for a spousal benefit though, if the non-Social Security covered pension she receives is based on her work for a governmental agency (e.g. federal, state or local), then it’s probable that any spousal benefit she’d otherwise qualify for would be offset by 2/3rds of the amount of her government pension. That would be due to the Government Pension Offset (GPO) provision.
Furthermore, filing for your benefits early could also reduce the amount that your wife could qualify for as a widow if you die before her. My company’s software — Maximize My Social Security or MaxiFi Planner — is fully programmed to handle computations involving both the Windfall Elimination Provision (WEP) and GPO, so you could use it to analyze your options so that you can determine your best strategy for maximizing your benefits. As I noted in another question above, Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry