A tool to determine the best time to take Social Security benefits
Could You Be Leaving $100k+ in Social Security Benefits Unclaimed?
by Gary Foreman
If you're like most of us boomers, you began paying into Social Security when you were a teenager. I was 15 when I got my first real job at Dave's Drive-In in Franklin Park, Ill. I earned 85 cents an hour to start. 3.9% of my pay was deducted for my share of Social Security tax. (source: Social Security)
That was 1967, the same year the Beatles recorded "When I'm 64". As a 15 year old that seemed like an impossibly long way off. Yet, here we are. I've been working continually for nearly 50 years. (no wonder I'm tired!) And during that time every paycheck I've earned has included a deduction for Social Security. Today the rate on my share of Social Security has risen to 6.2%.
Now it's time to start thinking about when to begin collecting on Social Security. The temptation is to say "now" and start to see the checks roll in. But it's not that easy. A little research informed me that a wrong decision could cost a married couple up to $120,000 in lost benefits! So making a good decision now is important.
I'm a former financial planner who has been writing about personal finances for 20 years. My wife is a CPA. You'd think it would be easy for us to collect some info and make a decision. At least that's what we thought.
I found that the rules and exceptions are many and complex. It's easy to overlook something that could make a huge difference in your lifetime benefits.
The natural place to begin would be the Social Security Administration. But they're instructed not to answer questions on when you should begin taking benefits. They'll tell you to get "Your Social Security Statement" which will estimate how much you'll get each month at full retirement age. But help you decide when to begin collecting? No way.
(by the way - you should get "Your Social Security Statement" - It's the quickest and easiest way to get some of the info you'll need to make a choice. You can request it online here. The results are a download so you can print them off immediately. No need to wait for the post office.)
So we figured we'd do it ourselves. My wife is an excellent researcher and works through tangled financial affairs all day long. But it's not an easy calculation. Especially for a married couple. So on to 'Plan B' - find a calculator to help organize the data and present it in a meaningful way.
In our search we discovered SocialSecurityChoices.com. I looked at the credentials of the people responsible for the site. There are 4 of them. Between them, they have 2 doctorates in economics, 1 doctorate in computer science and a bachelors in economics. One of them worked for the Social Security Administration and the other has written about it in peer reviewed journals. All that tells me that I'm getting reliable information that I can base a decision on.
I accessed the software on their site. Naturally, I had to fill in some blanks. No truly confidential information required. So all of your data is safe.
Note: One question might require you to visit the Social Security site. You'll be asked what your payment will be at full retirement age. It's found on the front page of "Your Social Security Statement." You can get your statement here without charge. You'll need to provide your SS# and date of birth.
Once you have filled in all of your necessary information on SocialSecurityChoices.com, you will receive a 14 page report explaining the various options and your choices. You can see a sample analysis here.
I was so impressed with the results that I contacted one of the principals. I asked about making it available to The Dollar Stretcher readers. Not only was he open to that, but we became an affiliate. If you use our code "retirement" when you order you'll get a 25% discount on the $39.95 price (now only $29.95 for our readers).
To get a customized report you'll be asked to provide a little non-confidential information:
- an email address to deliver your report
- years of birth for both you and your spouse or ex-spouse (if appropriate)
- an estimate of Social Security retirement benefits for you and your spouse or ex-spouse (if appropriate). You can get this information online from Social Security in a matter of minutes
Next it's time to order your report!
They have specific paths for:
Bottom line? You could just make a decision and hope that you geot it right. But by spending less than $30 and a few minutes of your time you could collect as much as an additional $100,000 in Social Security payments. For someone who started out making 85 cents an hour, that's a really good return on my time and money. Don't forget to enter the coupon code for your discount at the very end. Type "retirement" in the box for 'Coupon Code'.
Take the Next Step:
- Get serious about your retirement planning by deciding when you'll begin receiving your Social Security benefits.
- Decide what retirement looks like to you.
Share your thoughts with the editor.