Avoid Social Security Screwups

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Most people don’t know even the basic rules of Social Security. That can lead to filer’s remorse—and thousands of forgone dollars.


Not long ago, I attended an all-day seminar on Social Security, my goal being to soak up as much as I could about a devilishly complicated system. By noon, my brain had started to feel numb; by late afternoon, facts were bouncing off it like rubber darts. Considering that I already had a working knowledge of Social Security, I wondered how anyone coming at it cold could possibly master all the details.

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Not very well, it turns out. A recent report by the U.S. Government Accountability Office concludes that most people don’t know even the basic rules of Social Security and the strategies available to them. Among the fuzzy areas: the importance of health and family longevity in the claiming decision; the availability of spousal and survivor benefits; and the impact of filing at different ages. (If you file as soon as you’re eligible, at 62, your benefit will be 25% less than if you file at full retirement age, which is now 66. For each year you delay filing after full retirement age until age 70, you get an 8% boost.)

That lack of knowledge can lead to filer’s remorse—and thousands of forgone dollars. A 2016 survey by the Nationwide Retirement Institute shows that of the women surveyed who are taking Social Security, almost 20% wish they had waited to file to get a bigger paycheck.

You’d think that a Social Security claims specialist would steer you in the right direction. In fact, claims specialists are neither trained nor authorized to give personal advice, and they have been found to provide inconsistent, misleading or inadequate information, according to the GAO report. Worse yet, sometimes their answers are flat-out wrong (see New Rules for Social Security Create Confusion Over Claiming Strategies).

How to protect yourself. Your best protection against bad or missing information? Do your homework. Start with the Social Security website, which presents a basic overview of the system’s rules and claiming strategies. Also check out our Boomer’s Guide to Social Security ($10). For a deep dive, pick up Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security, by Laurence Kotlikoff, Philip Moeller and Paul Solman ($20). This readable book presents a soup-to-nuts guide to the available options, including recent changes to the claiming rules.

You could also seek advice from a financial planner. Look for one with a solid grounding in Social Security, such as a certified financial planner (CFP), and ask what tools he or she uses to find your best filing strategy. “Professionals who are serious will use a commercial software program,” says Theodore Sarenski, a certified public accountant and CFP in Syracuse, N.Y.

Or consider subscribing to software such as Maximize My Social Security, starting at $40, or Social Security Solutions, starting at $20. These programs run scenarios based on your circumstances and show how different filing strategies affect the total payout over the same time frame.

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Your last hurdle is filling out the application, which can be tricky. If you’re applying online, use the Remarks box to specify the date you want the benefits to kick in—otherwise, Social Security might start the payments earlier, potentially reducing the amount you get or precluding certain filing strategies. Also make a note in the Remarks box if you are restricting your application to spousal benefits, for which there is no separate line.

You can avoid some of this confusion by filing in person, as long as you tell the claims processor “exactly what you want to do,” says Kotlikoff. If you get information you know is wrong, ask for a supervisor. Be sure to review the application before you leave and get a dated copy of it.