I called the national Social Security phone line last week to discuss survivor benefits. (More on that later.) Of course, the person I spoke with could not actually process my claim. Instead, he had to schedule a future telephone appointment to do that, with my local Social Security office. The first available appointment time was in August. Keep that in mind if you need to apply for a benefit that cannot be processed online. Before I called to file a claim, I did a lot of research on what I was about to do. Given my circumstances, determining the optimum filing strategy was quite complicated.
Social Security retirement benefits are a target of fiscal cliff spending cut advocates. One specific proposal is to modify how cost of living adjustments are made to annual Social Security retirement benefits. I don’t get it.
It is estimated that 10,000 baby boomers are retiring every day. Most will depend heavily on Social Security retirement benefits. Particularly for a married couple, the decision on when and how to claim Social Security can be complex. This has resulted in the launch of services designed to advise you on how to maximize Social Security retirement income, based on your individual circumstances. I like the concept and will probably use one or more of these services when I approach full retirement age. I turn 62 next month but I already know I will not claim that early.
I am in a state of transition in my political views about economic issues. For many years, most of what I wrote and said about national economic matters would have put me squarely in the “fiscal conservative” category. But some of that is changing. I wonder if it is changing for other baby boomers?
I am on a Social Security roll this week. I hear this a lot: “I am claiming Social Security as soon as I turn 62 so that I can get my retirement benefits before the government takes them away from me.” There are several different ways of assessing this argument. None of them have persuaded me that this alone is a sufficient reason for claiming at age 62.
Bill Keller is a columnist for the New York Times. He recently wrote a column challenging his fellow baby boomers to support cutbacks in “entitlement” programs, i.e. Social Security and Medicare. He referred to boomers as the “entitled generation.” I dislike use of the term “entitlement” in this context because so many of its users throw it out as a pejorative against those who receive the benefits. Keller supports some form of Social Security “means testing.” Let’s talk about that for a moment.
In 2009, I wrote a post on the key concepts of Social Security spousal benefits. This popular post continues to receive numerous search hits and comments. I regularly receive email questions about different claiming strategies involving married couples and Social Security. A frequent area of confusion is what happens if the spouse with lower lifetime earnings retires early and begins receiving Social Security retirement benefits at age 62.
Like me, the Social Security Administration is trying to reduce its paper load. It took a major paper-killing step forward yesterday when it went live with online access to your Social Security Statements. Previously, these were snail-mailed to you annually. You could generate a benefit estimate using the SSA retirement benefit estimator but other important information (such as earnings history) could not be accessed.
Is delaying Social Security the world’s best investment? Think about that for a minute. I will turn 62 this year, making me eligible to claim Social Security retirement benefits. While I have already decided against taking the money early, I still enjoy checking the validity of my decision with some economic due diligence.
My experience as a volunteer tax preparer tells me that there is a lot of confusion among retirees about how Social Security benefits are taxed. This is a significant topic and not just for tax planning purposes. Taxation of benefits is also important to the threshold decision on when to claim Social Security retirement benefits. So let’s review some basic Social Security vs. income tax concepts.