Social Security may be one of your largest assets. What and when you collect will make a huge difference to your lifetime benefits.
Today’s column addresses the timing of filing, increasing benefit amounts, when benefits can become available, how to proceed in the absence of a birth certificate and the calculation of spousal benefits and payments of delayed retirement credits. Larry Kotlikoff is the founder and president of Economic Security Planning, a company that markets Maximize My Social Security, a Social Security benefits calculator referred to in this post.
Ask Larry about Social Security:
When Do I Need To Notify Social Security To Start My Retirement Benefits?
Hi Larry, My birthday is 12/31 and next December I'll be 66. My Social Security retirement benefit will be $2,000. When do I need to notify Social Security to make sure my benefits start appropriately? Also, how much can I make a year working part time with out losing any my full monthly benefit? Thanks, Stan
Hi Stan, You can submit your Social Security application up to 4 months in advance but filing just a month or two early would likely give Social Security plenty of time to get you paid in a timely manner. You can file online or by calling or visiting a Social Security office. Before filing, though, you may want to an expert Social Security benefits calculator as described in other answers to determine if you have better options available.
There is no limit on earnings starting with the month in which you reach full retirement age, so it doesn't sound like that should be of any concern for you. Best, Larry
Am I Correct That I Should Wait Until Age 70 To Start Drawing Benefits If I Want To Receive The Highest Possible Rate?
Hi Larry, I’m 60 and my wife is 48. She earns much more than I do. She plans on working for at least another 10 years. I'm not sure how much longer I'll be working.. I assume that I should wait until 70 to begin receiving my full Social Security retirement benefits. My goal is to collect the highest benefits possible, naturally. Am I correct? Thanks, Allan
Hi Allan, Yes, if you wait until age 70 to start drawing your benefits your monthly retirement benefit rate will be higher than if you start drawing at your full retirement age. You could potentially increase your future benefit rate even further with additional earnings, but only if you earn more in a year than in one or more of your previous highest 35 years of wage-indexed earnings. An expert Social Security benefits calculator, such as my company's software or another top rated calculator that lets you model future income estimates and hypothetical filing dates, can help you sort through your options and know the consequences of different decisions. Best, Larry
When Will I Be Able To Receive Benefits?
Hi Larry, I'm a retired civil service worker and I worked a side job which let me earn Social Security credits. A Social Security representative informed me that i received too much monthly to get a Social Security benefit check. When my divorce is final, I will have only my divorced spousal benefit. Will I then be able to receive a retirement benefit based on my previous work? Thanks, Holly
Hi Holly, If you have at least 40 quarters of Social Security coverage, you should be able to receive at least some Social Security retirement benefits when you qualify. Your benefit rate may be lower than normal if you receive a civil service pension due to the Windfall Elimination Provision (WEP), but the WEP could only partially reduce the rate payable, not eliminate it entirely. Best, Larry
What Is Our Best Course Of Action?
Hi Larry, My wife turned 67 in 2017 and applied for spousal benefits. Social Security refused to pay them because she has no birth certificate. She does have and submitted a passport, driver's license, etc. She appealed, and their office in Chicago sent a list of still more documents she could submit, so we sent the additional documentation. Months have passed, and we've had no response. What is the way to get a response? Thanks, Stuart
Hi Stuart, If your wife submitted proof to Social Security that the state in which she was born has no record of her birth, then they should accept the types of documents that you submitted as secondary proof of age. It sounds like you've probably taken all the proper steps to resolve the issue, but if you already have an appeal pending there's probably no way to speed up the decision on it. You could try asking the offices of one of your congressional representatives to make an inquiry, but you'll likely just need to wait out the process. Best, Larry
Is The Information That The Social Security Representative Gave Us Accurate?
Hi Larry, I turned 66 in 2017, but have not yet started collecting my Social Security retirement benefit. My wife turns 66 next month. We both intend to file for Social Security benefits next month. My wife intends to apply for restricted application. According the the Social Security representative, my wife will get half of what I was supposed to get when I turned 66; not half of what I am entitled to now. Also, they said that by filing in February, I will only get what I was entitled to this January and will have to wait until next January to get the amount due me by filing in February. Are these claims accurate? Thanks, Roger
Hi Roger, Essentially, yes. Your wife will get 50% of your Primary Insurance Amount (PIA), which is equal to your full retirement age (FRA) retirement benefit amount. Also, your last delayed retirement credit (DRC) for January 2019 will be due effective with your check for January 2020, but it may take close to 2 years for Social Security to actually processes that increase. They will eventually pay you any back pay due, though. You and your wife may want to use an expert Social Security benefits calculator, such as Maximize My Social Security or another very careful program, to make sure you are choosing the best possible filing strategy. Best, Larry
To learn more about your Social Security options, visit Economic Security Planning, Inc.