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Ask Larry: What Have I Done To Myself By Filing For My Social Security Benefits Early?

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Today’s column addresses questions about potential effects of having filed early, making sure your benefits are actually suspended even if a representative mistakenly says you can’t suspend them and potentially available benefits on an ex’s record. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

What Have I Done To Myself By Filing For My Social Security Benefits Early?

Hi Larry, just as I turned 62 I found myself without work and did not know my future prospects so I filed for Social Security retirement benefits. I found good work again but collected a total of five months of benefits before they stopped due to my income. I did not know that I could pay that money back within one year, and I missed that window.

That was over two years ago. My full retirement age is two years from now, and I will turn 70 in less than six years. So what have I done to myself with the five months of benefits, and how can I maximize my benefits at full retirement age or age 70? Thanks, Ken

Hi Ken, Your Social Security retirement benefit rate will be permanently reduced for any months that you collect benefits prior to your full retirement age (FRA), but drawing five months of early benefits would only reduce your permanent benefit rate by roughly 2.8%.

As long as your earnings between now and your full retirement age (FRA) are high enough to prevent you from collecting any additional months of early benefits, that’s probably the extent of the damage you’ve done by filing for your benefits early.

However, until you reach FRA you can’t voluntarily elect not to be paid any benefits that could be payable to you based on Social Security’s earnings test. So if your earnings aren’t high enough to preclude the payment of additional months of benefits prior to your FRA, your permanent benefit rate will be further reduced in return for being paid benefits for those months.

You could still elect to voluntarily suspend your benefits starting with the month you reach FRA in order to accrue delayed retirement credits (DRCs) until you reach 70. Doing so would increase your benefit rate by 2/3rds of 1% for each month that you decline to collect benefits from FRA until age 70.

So voluntarily suspending your benefits from FRA until 70 would be the best thing that you could do if your goal is to end up with the highest permanent monthly benefit rate. However, you may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze your options so that you can be sure to determine the strategy that you feel would best meet your goals. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

What Else Can I Do?

Hi Larry, My wife and I were both born in 1951. Janice applied for her Social Security retirement benefit to start next month and I called to suspend payment of my retirement benefit and her spousal benefit, which I started at my FRA.

The first three reps I spoke with told me it wasn’t allowed even though I pointed them to the Social Security website page explaining that I can suspend my benefit. I was disconnected from the next two reps when asking how to pursue this after long waits while they researched.

Finally the fourth rep agreed to put in the request after about 40 minutes. Before doing so, she informed me that it would do no good since they are ten months behind. She then said she submitted the request to star next month but insisted there was no confirmation she could give me or send to me affirming my request.

What else can I do? Thanks, Harry

Hi Harry, Well, that’s a disappointing story, but not totally surprising. You can, of course, elect to voluntarily suspend your benefits until 70, but you certainly aren’t the first person to report that they’ve been told otherwise by a Social Security representative.

Thanks to your persistence, it sounds like you were finally able to connect with a Social Security employee who understood your options. Assuming that she made the proper computer inputs, you shouldn’t need to do anything further.

I would think that Social Security would issue an automatically generated notice once your request is effectuated, but I’m not positive. Although it shouldn’t be needed, I guess you could submit a written request for voluntary suspension by mail to your nearest Social Security office.

Submitting a written request wouldn’t be necessary if the representative you spoke with processed your oral request properly, but I suppose it couldn’t hurt. Best, Larry

Why Can’t I Draw My Divorced Husband’s Social Security?

Hi Larry, I am divorced. I was told I can’t actually draw my ex-husband’s Social Security. Why not? Thanks, Julia

Hi Julia, You can’t draw your ex-husband’s actual benefits, but you might be able to qualify for divorced spousal benefits on his record. Divorced benefits can potentially be paid on the record of either a living or deceased ex-spouse, provided that you meet the requirements. Note that filing on an ex’s record doesn’t affect the your ex’s benefits or any other benefits drawn on their record in any way.

To potentially be eligible for divorced spousal benefits on the record of a living ex-spouse, you must be unmarried and at least 62, your ex-spouse must also be at least 62 or drawing Social Security benefits and you must have been married to your ex-spouse for at least 10 years.

You must also have been married to your ex-spouse for at least 10 years in order to potentially be eligible for divorced survivor’s benefits on the record of a deceased ex-spouse, unless you have a child in your care who qualifies for child benefits on your deceased ex-spouse’s record.

Assuming that you don’t have a qualified child in your care, you must also be at least 60, or at least 50 and disabled, and you must be unmarried unless your current marriage occurred after you turned 60 or after you became entitled to disabled survivor benefits. Best, Larry

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