I think I picked a bad title when I called my little guide “Social Security: Simple and Smart.” I will never attract readers and get rich with such a boring title. Instead, I should have called it something like, “Buy this book and get thousands of extra Social Security benefits” or maybe, “Social Security Secrets That Will Make You Rich.”
I was thinking about this today while playing one of my little word games in the morning on my iPad. (My wife and I have this breakfast routine where we play a few online puzzles and games before serving up our scrambled eggs or cereal.) And while I was playing one of my word games, this teasing headline popped up: “Social Security Mistakes Can Give You A fortune” Having seen hundreds if not thousands of these come-ons over the years, I knew the story would carry the same tired old teasers that have been haunting older adults for the past 10 years or so.
People also read…
It’s all part of the “maximize your Social Security” craze that has been wildly popular for years. I have written countless columns about this hype in the past. Here’s my main message. There’s nothing wrong with trying to get the biggest return on your “Social Security investment.” I just don’t like all the terrifying stories and catchy headlines that would lead seniors to believe they are missing out on a “fortune.” This latest pop-up ad stated “seven mistakes to avoid to maximize your Social Security checks.” Let’s go over them.
1. Taking Advantages Too Soon
Surprise, surprise. This post is nothing new. Seniors have been advised for years to wait as long as possible, preferably until age 70, before starting their Social Security benefits. I’ve written many columns on this topic, so I’m not going to reinvent the wheel here. Just know this. From every financial planner who tells me to encourage readers to wait until 70, I hear from another planner who tells me to advise readers to take benefits at full retirement age. Some may even be wise to take benefits at age 62, as my wife and I did. You just need to gather all the facts, look at your other sources of income, consider your health, lifestyle and family genetics and make the best decision possible. And don’t worry about it after you’ve made your decision. Collect your Social Security benefits and enjoy life. Don’t let stories like this make you think you’ve missed a “fortune”.
2. Claiming benefits while still working
This concerns the wage penalty applicable to social security beneficiaries below full retirement age who are still working (usually part-time). Calling this a “mistake that could cost you a fortune” is a big stretch. Nearly all people affected by this law are seniors who work part-time to supplement their Social Security checks and who are trying to keep their earnings below the prescribed annual limit ($19,560 currently.) So taking benefits while still part-time working is often a good strategy and certainly not an expensive mistake for almost all of these older adults.
3. Not checking your earnings data
It is good advice to check your Social Security income from time to time before applying for benefits. The best way to do that is to check the Social Security Statement that the government sends you periodically. My experience tells me that most people do this religiously, so including it here as a “common mistake” is quite a task. And if you find a bug (which is very unusual), it’s relatively easy to fix. And even in the unlikely event that you don’t fix it, assuming it’s for a year or so, the missing income can deduct a few bucks from your monthly allowance. Certainly not “fortune”.
4. Making an Isolated Decision
It seems to me that this was just thrown in as filler for the article. The gist of their advice was to “consider all of your other sources of income before making a Social Security decision.” My comment on this: Duh!
5. Not Understanding What Qualifies For Social Security
The message of this advice is this quote from the article: “You are not automatically eligible for benefits when you retire. You have to meet certain admission requirements.” And then it points out that you have to work and pay taxes and earn at least 40 “credits” or “quarters” to get Social Security. Come on, people. Is This Really a Common Social Security Mistake That Costs You a Fortune? Unless you just landed here from the planet Neptune, who doesn’t know that you have to work and pay taxes to get a retirement benefit?
6. Not knowing the rules when it comes to divorce
Well, now they’ve finally made a real mistake that could possibly have been avoided. They’re talking about people who don’t know that they have to be married for at least 10 years to qualify for benefits on their ex-husband’s list. I’ve come across more than a few women over the years who got divorced sometime before the age of 10. But here’s the deal, if you’re a 35-year-old divorcing a bad or maybe even abusive spouse, potential Social Security benefits are the furthest from your mind. I’d suggest this: if you’re getting divorced after nine years and ten months, or something close, it might be okay to stick with it for another two months. But if you dump them after, say, seven years of marriage, do you want to stay in chains for another three years if you one day qualify for some of their Social Security?
7. Disregarding Dependent Benefits
And again, another great piece of advice. But honestly, there aren’t that many retirees who have minor or disabled adult children at home. But if you do, it may make sense (assuming you meet all the other conditions) to start receiving benefits from age 62, because the extra money that has to be paid to the child(ren) is the money you could lose, can compensate by not waiting until a later age to claim benefits.
If you have a Social Security question, Tom Margenau has a book with all the answers. It’s called ‘Social Security: Simple and Smart’. You can find the book at creators.com/books. Or search for it on Amazon or other bookstores. Visit www.creators.com to learn more about him, read past columns and see features from other Creators Syndicate writers and cartoonists.