The Trip To Social Security


This morning I spent about an hour and a half with an extremely helpful and knowledgeable representative at the local office of the Social Security Administration. As with any Federal agency, he was extremely careful with exactly what information he was (and was not) providing. With Social Security I also want all to note that the following relates only to my personal circumstances.  I definitely encourage everyone to make an appointment with their local Social Security Administration Office. Note that the wait for an in-person appointment in my city was about 2.5 months, but well worth the wait. At the office this morning, there was a line outside the door about 30 people long at 9:00 AM.  When the doors opened, the officer first asked if there were any people with appointments.  Those of us who had them were admitted immediately, and I was meeting with a representative within two minutes. He worked with me until he had answered all my questions, and then began the application for Social Security Benefits.  The entire appointment lasted about 1.5 hours. Also note that I tried to apply on line for benefits in April (it is now July), but was not able to complete the filing. They are backdating my first check to the April date.

Here is a summary of what I learned, and the options that I elected. 

First was the election to take or not take Social Security at this time.  For me that depended on what my monthly Social Security income would be, and future changes to that monthly payment. I could elect to take benefits based on my income this year or survivor benefits based on my husband’s earnings. You can claim benefits as early as age 62. The amount of the survivor benefit is set at the date of death of the spouse – it will not go up except for cost of living increases.  Even though my current personal benefit is lower than my survivor benefit, it can increase if my future earnings increase and as i approach full retirement age. At its current amount, just by my increase in age, my monthly benefit will exceed that of my spouse in July, 2017.  At that point I can cross over – make the election to change from the survivor benefit to the spousal benefit – but I can only cross over one time. I have made the election to claim the benefits as spouse until my personal benefit exceeds the spousal benefit (somewhere about 2017).

The last item that is extremely relevant is the cap on income. If you are younger than full retirement age (66 IN 2014, and increasing annually), $1 will be deducted from your benefit for each $2 you earn above $15,480 (a 50% penalty). In the year that I turn 66, the deduction will be on $1 for $3. This “payback” decreases as I reach Full Retirement Age. There will be more about that later if it becomes relevant in my circumstances, but I doubt it will be an issue for me this year. I consider this an “investment” year for me as I retool my skills. There are some good articles online on this topic.

I encourage everyone to make an appointment to visit their local Social Security Office and have a personal discussion with the trained professionals there. The only documentation that I was required to present was my proof of age (a driver’s license or passport works), an official Death Certificate and a Marriage Certificate.  Mine had gone astray, so I had to order a legal copy from our state Vital Records department, which took about three weeks. (Plan ahead!!)

Good luck on your adventure with Social Security and post your results!


The “Social Security Workshop”


One of the important pieces of money management after a spouse dies is the coordination of both the husband’s and wife’s benefits.  I signed up for a workshop last Saturday that I hoped was going to explain (so that I could understand) how the coordination would work to the surviving spouse’s best advantage. The person offering the workshop was quite knowledgeable, but had a preprinted “booklet” and was using slides that had different material on them, so I was having a hard time keeping up with the details. After about an hour and a half I had pretty much decided that this was just another presentation that did not take the audience’s comprehension into consideration when presenting the material. Because I have some experience teaching adults, I find this especially frustrating.

But with thirty minutes to go, the presenter turned to the true topic of the entire two-hour presentation: A simplistic, extremely pessimistic financial model which shows the “baby boom” bankrupting the treasury resulting in the eventual loss of the Social Security System. His solution to this challenge is to invest in annuities! (ALL of your money in annuities that would survive the collapse of the Social Security System and a stock market major adjustment).

Now, I have to admit that this is one possible scenario with the tsunami of graying baby-boomers, but I was truly incensed that his ONLY offered solution was to purchase annuities which – wait for it – he happened to sell, and he would be glad to schedule an appointment before you left that day, adding “The appointments are going fast since the classes have been so well attended.”

This very topic is one that I have been reading about for a while, especially the Social Security portion since it will be an important part of my financial stability for the coming years (and I will write about it later when I feel I can present a balanced view of facts).

BUT I can ASSURE you that investing ONLY in annuities is NOT the answer.

There are many knowledgeable people providing excellent information to assist those of us who are retiring.  There are fewer people addressing the specific needs of widows, which is the reason I have entered on this project. But PLEASE be careful when someone offers “the only solution” to a complex problem.  Buyer Beware!!