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WHEN I CLAIMED SOCIAL Security benefits, I had no idea how much there was to know—and how much I didn’t know. Bear in mind that the Social Security website didn’t exist until the late 1990s, and back then only minimal services were accessible through the site. In addition, most people didn’t fully appreciate the advantages of delaying benefits.
In my naïveté, I thought I would go to my local Social Security office to find out what options were available for claiming, and what the optimum time would be for me to begin benefits based on my earnings and marital status. Surely they would help me make the best decision? After all, they were the experts.
Big mistake.
I had no intention of signing up at age 62 but found my arm being twisted, ever so gently, to do just that. Now, I’m not beating up on the Social Security agents. They’re usually polite and congenial, but they vary in knowledge and experience, and sometimes lead you to a decision that may not be in your best interest. Lesson learned: If we feel uneasy about a financial decision, it’s usually a sign that we need to do more research.
Later, as the time was drawing near for my husband to file for his benefits, I made an unrelenting, in-depth study of the ins and outs of Social Security claiming so that he might avoid my error. My efforts paid off in 2007 when I read an article in The Wall Street Journal by Glenn Ruffenach, titled “The Baby Boomer’s Guide to Social Security.”
The article neatly outlined an option for married couples, whereby at full retirement age, one spouse—my husband, in this case—could employ the file-and-suspend option. This meant he could collect spousal benefits while earning additional retirement credits until he reached age 70, at which time he could start his own benefits based on his own earnings record. His spousal benefit would be equal to 50% of my benefit as of my full retirement age, though I ended up with less than my full retirement age benefit because I had claimed at 62.
When my husband attempted to pursue this claiming strategy at our local Social Security office, we were told by the staff that they weren’t aware of it. This time, however, I asked them to call Social Security headquarters in Baltimore to confirm our information. We were then referred to a more experienced agent.
In the interest of brevity, I won’t go into all the headwinds we encountered. But in the end, the application was processed and it all worked out well for us, but not without some serious agita. Unfortunately, others can no longer follow our example because the window on file and suspend has been closed since April 2016. Still, for us, the strategy served to take the sting out of my earlier claiming mistake.
Today, there’s much more information on Social Security available, as well as a variety of calculators that will help you sort out your claiming options. You can also create an online account with Social Security, even if you’re still years away from claiming, and get information on your likely monthly benefit.
If you can afford to and you’re in good health, try to avoid anything that would reduce your maximum benefit. It’s said that too many people underestimate their longevity. To get a handle on how long you might live, head to LongevityIllustrator.org.
After claiming, if you feel you may have made the wrong choice, you can apply to Social Security for a re-do if you’re within a year of your application’s approval. You do have to repay all money you’ve received from Social Security and, if you’ve paid taxes on the income, you’d need to file an amended return to get that money back.
An interesting footnote: In January 1940, the first monthly retirement check was issued to Ida May Fuller, a legal secretary, in the amount of $22.54. She retired in November 1939. The accumulated taxes on her salary, during the three years she paid into the Social Security program, came to $24.75. Fuller started collecting benefits at age 65 and lived to be 100. During her lifetime she collected a total of $22,888.92 in benefits.
Marjorie Kondrack loves music, dancing and the arts, and is a former amateur ice dancer accredited by the United States Figure Skating Association. In retirement, she worked for eight years as a tax preparer for the IRS’s VITA and TCE programs. Check out Marjorie’s earlier articles.Want to receive our weekly newsletter? Sign up now. How about our daily alert about the site's latest posts? Join the list.
I appreciated the article’s good advice to be cautious about information provided by Social Security staff. My experience with Social Security when enrolling in both SS and Medicare could not have been better but I’d also done a lot of research (especially Mike Piper’s book) and didn’t need any advice. So – the contrarian view: The author believes it was a mistake for her to claim SS earlier than FRA and of course that may have been true for her specific circumstances. But – a blanket statement that this is always, or even generally, a mistake for the lower earning spouse is just wrong. Mike Piper in both his book and his excellent calculator makes the point that usually a couple’s claiming decision is best made on joint life expectancy. The surviving spouse will receive the higher of the two benefits. Again depending upon the couple’s circumstances the higher lifetime aggregate benefit decision is often for the lower earning spouse to claim earlier than FRA. Piper’s calculator demonstrates this. So – this is no more than a quibble but earlier is not always a mistake.
your points are well taken Keith. In my case I went to SS office to review my options totally unaware of all of the above— depending on the agent’s knowledge. I do believe that File and Suspend is what saved the day for us. And, as stated, it all worked out well for us, in accordance with our circumstances.
Thanks for your sharing your knowledge.